Immuron’s Revolving Door

Immuron (ASX : IMC) is one of those Long Tail companies that has become such an entrenched part of the fantasy and delusion of ASX biotech that it would be hardly worth a mention, were it not for recent events.

At some stage I will write a longer piece as to why IMC’s technology is a superb but fundamentally flawed idea, but the basic synopsis is as follows. IMC uses bovine vaccination and colostrum collection (that’s the particularly rich mother’s milk that is immediately expressed when calves are born, to confer passive immunity) to produce a milk-based product that contains large amounts of antibodies against whatever the cow was vaccinated against. When those antibodies are “consumed” by us, that vaccination effect is theoretically transferred to us. Pretty simple concept really – and a very real biological concept. For example, when babies take mother’s milk, all kinds of immunity is passed on (antibodies, immune cells, different sorts of signaling proteins, etc.).

The fundamental flaw with IMC’s technology is that for most of the very serious diseases that it wants to protect us against using this approach, we probably need IgG-type antibodies to direct our immune system. Most of the immunity that is able to be conferred through the consumption of a colostrum product are IgA or “mucosal” antibodies that are designed by nature to be able to survive in the harsh conditions of our stomach/digestive tract (IgGs generally don’t survive oral administration unless heroic formulation/drug delivery used). Therefore although it is possible to confer a limited immunity to certain pathogens in this way, most applications of this technology that IMC has in mind have a very minuscule probability of success. Moreover, IMC processes its colostrum into a powder form that is turned into a tablet. That’s a pretty high processing bar for packaging an antibody drug, for oral consumption no less.

My summary take on this company’s biotechnology is cool idea (but then I am a sucker for agricultural biotechnology), could work in certain instances (the C. difficile partnership with Monash has me curious), unlikely to work in most instances … and mostly just a gimmick. IMC is a company that also has a generally poor reputation for corporate governance, something that I think is reasonably reflected in its director/executive turnover the past few years. Frankly, if I may be honest, I also take (as a default position) a skeptical view of any company that Roger Aston is involved with because I can’t point to a single enterprise in his portfolio that I would personally put my money into.

Of course, others would argue that I am missing out on great opportunities with Regeneus, Cynata and Immuron. Hmmmm. I guess we will just have to agree to disagree.

The company has had a fair amount of leadership turn-over and a leadership structure that is “unusual” to say the least. For such a small company, a “VP of Innovation” (Dan Peres) was sort of an unique appointment, especially if the goal of the company is to seriously push forth on an OTC consumer product and simultaneously run a serious and “big boy” Phase II study in NASH. I must confess my curiosity was already piqued when on the 2nd of July, the company gave a progress update on the NASH recruitment where the glowing soundbite was provided by the “VP of Innovation” and not the CEO. A clinical trial that is possibly running behind schedule (recruiting slowly) is not a minor issue, and certainly a matter that is worthy of a little communication gravitas from the CEO of the company. Perhaps then in perspective, recent events are not so strange.

Back in April, the company announced the appointment of Dr. Leearne Hinch as CEO. I have never met or spoken to Dr. Hinch but by all accounts from several respected colleagues, she is a solid citizen. Dr. Hinch has a good track record of working with growth-stage companies, and her combination of human and veterinary medicine background would seem to be an unusually good fit for what Immuron is doing. A mere 3 months after joining Immuron, Dr. Hinch has resigned from a company that has had, as I have said, a fair amount of leadership turnover.

If Immuron really does have a technology proposition that is investment-worthy, then it seems to me that other than the customary CEO responsibilities, there would have been two major focus areas for Dr. Hinch. The first would have been to build an OTC franchise for the Travalan diarrhea product. That doesn’t immediately seem like a strong fit for Dr. Hinch’s background, but driving a consumer healthcare product is also mostly about building a distribution network and investing heavily in marketing. Indeed, if leading a global consumer healthcare marketing program was Dr. Hinch’s main objective, then the company is woefully undercapitalised to perform that task anyhow (and with sales from the most recent annual report suggestive of ~$1m, that’s a pretty big market yet to be created). In any event, I don’t believe that a company that wants to develop a sophisticated pipeline of products sends the CEO out as S&M fodder – you hire people for that.

Perhaps less “VP of Innovation” (spin?) and maybe more a VP of Sales and Marketing?

Just an idea…

The second major area of responsibility that Dr. Hinch would have had, would have been the NASH program. It is my opinion, based on her experience and qualifications, that this would have been a responsibility well within her capabilities. As I have previously commented, NASH is a increasingly important therapeutic arena with a lot of momentum at present. None of IMC’s other clinical programs really, frankly, excite me. IMM124-E, if it works, is going to be the place where the company would want to focus its (very limited) financial and leadership resources. If IMM124-E works, notwithstanding that the NASH space is extremely congested at the moment, it could be a very disruptive product strategy and, if it works, isn’t the kind of game-changing program that a CEO walks away from after just 3 months.

My personal opinion is that there is no real evidence that IMM124-E works. Not even the early clinical data was all that compelling or robust, it was just merely interesting. This is a company that pushed forward on hyperimmune colostrum product for diarrhea when it probably doesn’t perform better than “ordinary” colostrum, and it has a bit of a patchy clinical development track record (Travelan for Hep C, are you serious?). Don’t get me wrong, the idea behind the company is truly beautiful but the science is fundamentally flawed and there is no place anymore for ASX-listed biotech companies that trade on a mere “good idea” because the average punter with an eTrade account can understand the principle of passive immunity. However when a CEO resigns after 3 months in the job, a decision that must have been incredibility difficult given that it could be perceived by some (but not me) as suggestive of personal shortfalls, this is a true warning sign.

My speculation is this. Dr. Hinch found out that cow antibodies aren’t going to protect us from NASH. Just the same way as unlimited MSC stem cells from a single donor isn’t a panacea, or blitzing a patient’s melanoma and injecting it back into them doesn’t cure cancer.

Get my drift?

In fact the only thing that Dr. Hinch might be criticised for, is a lack of due diligence when considering the job. But given that there aren’t a whole of biotech/biopharma CEO positions open in Australia at any given moment, she can probably be forgiven for that too.

11 thoughts on “Immuron’s Revolving Door

  1. A badly misinformed, but understandably so, review of the Immuron Technology Platform. What the reader fails to understand is the research results which have warranted the investment in the Phase II study in Nash do not in any way rely on the concept of passive immunity or the systemic delivery of IGG, or IGA.

    IMM-124e is composed of anti LPS antibodies and clostrum derived adjuvants which target the gut micro biome and the immune system. This synergistic affect was seen in several of the trials which impacted the inflammatory process and demonstrated a systemic impact and despite IMM-124E inability to enter the bloodstream, it was having a positive impact on Tregs and other markers. A quite remarkable result.

    Further in the small study on 10 human patients IMM-124E showed an extraordinary impact on HBA1c despite the study only being a 30 day trial and typically HBA1c being difficult to impact in less than 90 day dosage studies. Again IMM-124E was demonstrating, albeit in a small trial, a systemic affect being a reduction in the levels of glycated haemoglobin in the bloodstream

    The data was presented to a panel of eminent Liver specialists including Dr Arun Sunyal former President of the American Liver Association and to the HIH in the USA. The National Institute of Health were so impressed they chose IMM-124E as one of only three products to include in a $12 million dollar clinical trial in ASH. Not a bad endorsement by one of the World foremost medical research centres on a little Auzzie biotech!

    The NASH study has been endorsed and supported by most of the worlds most eminent Specialists in the field who understand that science combined with the exceptional safety profile of IMM-124E was worth supporting.

    As for Travelan, its the greatest product in the world, in its category, and probably the only one that works to protect from Travellers Diarrhoea. IT is a resounding endorsement that not only does IMM-124E survive in the gut, but it actually thrives and “collects” E-coli and other gram negative bacteria to protect against disease.

    Investment in Biotech is difficult even harder when ones own technology is misrepresented on not understood at all. This little biotech may not be perfect, but it is getting better all the time.

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    • Hi Peter,

      The strive for continual improvement is a worthy objective.

      I did not specifically comment on the details of the IMM-124E technology, but I will do so soon. I will send you the post in advance so you may comment on its technological accuracy and ensure that when I do post it, we don’t end up in the awkward situation where you have to correct me in public. Contrary to your assertions above, I don’t get my science wrong, although my comments on Immuron’s technology (in this post) were very high level and intended to be reflective of the general platform concept.

      But … to be clear, for the “readers” (as you say) this is your company’s own product description for the NASH program:

      IMM-124E is a natural product for the treatment of Fatty Liver and NASH. IMM-124E contains the natural ingredient, Bovine Colostrum Powder, harvested from Australian dairy cows, which are immunised with Immuron’s proprietary Lipopolysaccharide vaccine. IMM-124E addresses the pathogenesis of NASH and of the metabolic syndrome. The antibodies in IMM-124E are actively sampled by the dendritic cells in the mesenteric lymph node thereby eliciting a cell mediated immune response.

      Since I have many non-scientific readers, I will also note that the mesenteric lymph nodes are in the small intestine. i.e. after you have ingested and processed the “therapeutic”. I suppose, therefore, contrary to your assertions above, it does involve something to do with antibodies? I also note that from your Phase II clinicaltrials.gov entry (NCT02316717) your “biologic” (also implicative) is compared against placebo. Of course, it is a weak and disappointing clinical trial design. You could have compared your hyperimmune colostrum to “plain” (i.e. non-vaccinated) colostrum from the same breed of animals, processed using the same cGMP process, produced at the same time (for comparable potency of “active ingredients). But you chose not to because in all probability you would have not have shown any difference in therapeutic efficacy. Please also don’t over-sell your prior clinical trials, they were weakly powered, used non-meaningful therapeutic windows and incredibly small numbers of patients. I didn’t say the data wasn’t interesting (I did) but I am not convinced it is meaningful.

      As for Travelan, the only thing that can prove that it is the “greatest product in the world” is its commercial success. By that metric it is not the “greatest product in the world” considering the number of people who get the shits on vacation every year and your current level of product sales.

      Peter, I promise you that I will not misrepresent your company’s technology and everything in my prior post (and this comment) is 100% accurate. Before I write my next post, as a matter of courtesy, I will confirm my technical understanding with your team directly. Your company’s lack of public domain materials of any scientific consequence (including peer-reviewed publication), means that independent scientific analysis involves a bit of detective work.

      Thanks for reading.

      Like

  2. Dear Anonymous- your name would be a nice thing to have?

    thank you again for your comments to which i can only reply, if we all needed guarantees on the “HOW” innovation would not develop at exponetial levels but rather occur with the rarity of a politician saying sorry.

    In the end we may both be wrong on the “how” question, and hopefully the exhaustive pathology testing we are doing in our study will educate us further on this question.

    On your criticism that Colostrum should have been used as a control, again i just say it sounds obvious, but if you review the scientific literature on colostrum you will find tens of thousands of great research on the benefits of same, however if you look at Theraputically registered products you will find almost none. Why? (Travelan is one in case you go looking)
    Because no one invest millions of dollars into Phase II and Phase III clinical studie without a IP protection and the prospect of a substantial commercial return.

    Immuron has patents and public and private data that shows our process create a colostrum with inique characteristics not found in nature. Despite this, your suggesting we should have procecuted a study and spend $5 million dollars of our prescious sharehloders funds ansering an academic question of how much better we were than colostrum to satisfy your opinion of good clinical design? Really? Isn’t it a good thing your not managing our shareholders money, because all we are interested in is how we can add value to our IP, not add to your academic curiosity. But i do admire you asking.

    Now let me set you a little challenge as i understand you consider yourself quite intelligent?

    What is the real reason $18 million market cap is a very very low valuation for Immuron? And, contrary to your assertions, in your revolving door post, why, if everything you said about our technology platform proved correct would you still be desperate to invest in Immuron?

    Like

    • Honestly, Peter…

      There is nothing “anonymous” about me or my site. My name is on the reply I wrote, my identity is fully revealed on this site. If that’s the extent to which you do diligence, then no wonder you put your money into Immuron. Don’t imply anything nefarious about this site – it is an alternative perspective for the average person considering parting with their hard-earned cash into your company, to give a counterbalance to the (mostly) absurd claims that are made by your company. I also don’t make it a habit of entering into pissing matches with company CEOs or major shareholders, particularly ones that are ill-equipped to have a fact-based discussion.

      On a more serious, and perhaps slightly more respectful note, I don’t have much to say to your comment. I accept your point that a new biotechnology is never a foregone conclusion (presumably that was the basis of your political analogy) but there are good ways of developing a technology, and bad ways. New data will always be appreciated and if your current Phase II study elucidates something exciting I encourage the company to publish it in a peer-reviewed journal and then crow loudly from the rooftops if the data is quality and defensible.

      As for my colostrum control comment, you clearly missed my point. So I will elaborate it for you. Your colostrum processing framework (your highly publicised cGMP processing scheme with Synlait?) could have been used to produce a batch of hyperimmune colostrum (i.e. from your vaccinated cattle) and a batch of “normal” colostrum taken from the same breed, with the same diet, with the same animal husbandry conditions (but without the vaccination). The “hyperimmune” and the “regular” batches could have been produced at the same time so that their potency (which usually diminishes as a function of shelf-life, since you insist on storing proteins at room temperature) would also then be equivalent. Why is this important? Because cows that are pasture-reared are exposed to all kinds of pathogens, including E. coli, and “normal” colostrum is well known to have very good immune boosting properties.

      Therefore, if you really believed in your science, and you really believed that the vaccination of the cows would yield an immunologically superior colostrum, you should have proved it. But you didn’t. What this means is that you have nothing more than a marketing claim that you cannot back up. It would not have been $5m of wasted funds, it would have been the data that you would have needed to 1) make a superior marketing claim 2) possibly obtain a regulatory designation for your product that would be a BARRIER TO ENTRY for your competition and 3) would have given you a differentiation from every other powdered colostrum product available on the market.

      … but I’m glad you “admire” my asking. Honestly, I feel stupid making the point.

      As for managing shareholders money, well I presume the $5m was your own money (I believe that is public domain) so you can piss away your own money however you like. But when you make outrageous quasi-science marketing claims to the general public in the hope that they will join in with your farce, then I take exception to that. I mean, frankly, Peter if you were a privately held-company there would be nothing to comment on. Private individuals are entitled to throw away their money however they like. I’m probably going to leave it there – you are a successful, and by all accounts, capable business man and I will therefore not patronise you by telling you that when you put your money to work in a venture, and it isn’t giving you an acceptable ROI, put it somewhere else.

      Lastly – your little challenge. I frankly, didn’t really get it which probably means I am not as smarts as you think, that I think, that I am (hope that makes sense). I think even at $18m, Immuron is over-valued. I don’t place any value on your NASH study because the science doesn’t support it. If I apply a comparable EBIT multiple to your Travelan franchise for a successful consumer health business, less of course the $$$s you are going to have to spend to get market traction for it through your current distributor network strategy, I think the business is worth about $5-7m. That’s ignoring the fact that most of the people involved in the business are singularly unfit to manage the affairs of a publicly-traded biotechnology company.

      But I will give you a little challenge back:

      1) If you can show that a batch of hyperimmune colostrum “vaccinated” with LPS produces a superior quantitative outcome than an equivalent unvaccinated colostrum in NASH
      2) If you can demonstrate that IgGs are not required and if your “therapeutic” has a consistent and characterisable formulation (very tough for something like this)
      3) If you can show that the process of lyophilising or whatever technique you are using preserves the material potency (that’s a standard test for a biologic )
      4) That the material has a reasonable room-temperature shelf-life

      … if you can prove all of those things, then I guess you will have a very significant product indeed.

      Like

      • drop me a private email and we may be able to give you a better briefing on the science under NDA given your background. You might be very surprised.
        Oh and Mark, Yes Travelan works! The team now realises the significance of this opportunity.

        Like

      • Dear Peter,

        I appreciate the gesture (truly, no sarcasm).

        My feeling is that when you run a public company, if you need a CDA to convey progress, probably need a different communication strategy.

        Good luck…

        C

        Like

  3. Chris

    Good stuff, entertaining and insightful as always.

    I must admit to having a soft spot for Immuron as my personal experience with Travelan has been very positive with trips for my family/friends to Indonesia (2), Cambodia, Phillipines and rural China with no TD. Of course this could be all random chance…but I’m running with it!

    You are right of course that the shame of it all is that the company is woefully undercapitalised to market this product as an OTC therapeutic…it is also difficult to market on the basis of an absence of a negative although my latter experience in Behavioural Economics suggest focussing on loss aversion bias.

    Like

    • Hi Mark,

      I actually don’t mind the Travelan product at all. I can kind of see the rationale for it and as I think I have said (repeatedly) I LOVE the idea of Immuron, I just can’t reconcile a few specific issues:

      – Batch-to-batch variability
      – Whether hyperimmune colostrum is better than “normal” colostrum given that pasture animals have high microbial exposure, including to E. coli (i.e. natural antibody development vs induced)
      – Room temperature storage of immunoactive proteins (in a powder form no less)

      The thing that also taints Travelan for me is when I look at the clinicaltrials.gov entries and see aborted clinical studies that are simply ridiculous (like Hep C). As petty as it sounds, it just makes me doubt the entire integrity of the venture.

      A lot of the time, ASX-listed companies do things in a “lite” way, thinking that bluster will make up for a lack of science. In the case of the Travelan product, I lament (on behalf of shareholders) that they didn’t do a simple study, namely side-by-side comparison of the same group of animals, reared under the same conditions, with the same colostrum post-processing but with one group not given the vaccination. Even in induced murine model of EPEC would have been interesting – but unless I have missed something, I haven’t seen that data.

      Unfortunately, to have more than just a “marketing gimmick” I think you need to show some kind of a scientific proof…

      Thanks for reading… and for sharing the personal experience with the product. Incidentally, having lived/traveled extensively in Asia/China (several hundred trips and longer stints in Vietnam and China) I can confidently say that washing hands/using sanitiser, avoiding ice, avoiding straws (always re-used), using bottled water (and being a bit careful about the “source” of bottled water), squirting a little lemon on cutlery, avoiding raw veggies (its the plate garnish that always kills you) and being wary of cold seafood dishes, I have only ever had the trots badly once…

      … and it was from a $250 seafood lunch in a top-class restaurant on the Bund in Shanghai … where I was served iced water from a pitcher, used a straw, enjoyed chilled prawns and probably ate the friggin’ garnish. 😉

      Like

  4. Hi Peter,

    I am not an Immuron shareholder, but have considered it in the past (I come from the country and love the idea of cows saving humanity). Having read your posts though, it has become clear that I should not bother with further research, much less actually buy IMC shares.

    I understand you are a significant IMC shareholder and have recently put your reputation more clearly on the line by joining the board. I also understand that you, like me, are neither a scientist nor medic of any standing.

    On this basis, your emotive, buzz-word laden scientific rebuttal and commentary on clinical study design carries little weight and only serves to reinforce the bloggers’ point that IMC is a science-lite venture. Moreover, your tone, grammar and obvious lack of research into this blogger strongly suggest your posts are a hastily conceived knee-jerk response to public criticism.

    In the face of critical analysis, I would have thought the board of Immuron (and their shareholders) would have preferred a considered response from someone with a little more credibility in the subject matter. Maybe I expect too much of public company Directors?

    Responding to a blogger on their blogsite, however intended, is an ill-considered strategy from the director of a public company. A piece of advice: Don’t wrestle with the pigs, Peter. The pigs will enjoy it and you will end up covered in shit.

    Like

  5. Pingback: The billion dollar bromeliad? | The Long Tail

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