Imugene’s Monster Raise

Following last week’s ASX trading halt request, I have been waiting for the announcement regarding Imugene’s (ASX : IMU) financing. The news came at market open this morning, specifically that the company had placed $3m through the “usual suspects”. Combined with the end-year disclosure, this means the company has about $5m in the bank +/- 10% with a tax credit due at some stage next year. I note that even a teeny company like this manages to pull off a $500k tax incentive (in reference to a prior post on tax credits).

Personally, I am pretty disappointed by this fundraising. $3m bucks doesn’t really move the needle. This company, if it is to be successful, needs $25-$30m to really do a proper job and evaluate the potential of the technology. The company is also currently CEO-less, which means that it is going to be tough for Paul Hopper to bring in new talent at this level of capitalisation. The appointment of ex-Genentech scientist Leslie Chong (terrific lady) is a positive move for the company, but it is still very light-on in human capital in terms of execution. As much as I like and respect Paul, he isn’t going to be rolling his sleeves up to run a drug development program, and neither is Axel Hoos, who has a full-time job at GSK.

When I first started looking at this company I was immensely skeptical, for two reasons. Firstly, peptide vaccines haven’t had, on the whole, a particularly stellar track record. Secondly, it’s not abundantly clear that there is a strong market opportunity for a new Her-2 targeting drug in the oncology space, either for breast or gastric cancer. In order for Imugene’s technology to really have a shot at displacing any of Herceptin’s market dominance (or the Roche Her-2 franchise more generally), it needs to do the kind of monster clinical trials that Roche did for Kadcyla and, frankly, the result of the triple-arm MARIANNE study that was announced last year illustrates just how treacherously difficult and expensive this can be. There is no doubt that given the results of combo pertuzumab/trastuzumab trial (the CLEOPATRA study) in Her-2 positive metastatic breast cancer, if the Imugene technology works, it will be worth comparing the polyclonal response to existing Her-2 combo monocolonal antibody therapeutics.

But that certainly isn’t going to happen with $3m.

As for Imugene’s stated goal of an orphan drug approval from the FDA, I say “who cares”? For some very rare genetic condition it might be a big deal but there are already so many existing gastric cancer orphan programs. Orphan designation is mostly just going to be a waste of effort and result in nothing more than a lot of hot air. In fact, I would argue that shooting for clinical data to (robustly) support an orphan indication is only going to add cost through a patient selection strategy that probably isn’t going to result in a payoff for the company anytime in the near future. It’s just hype for HotCopper punters, little more than high-quality manufactured news flow.

I have spent a lot of time looking at this technology, reading Ursula Weidermann’s papers and spent a couple of pleasant hours talking to Axel Hoos a few weeks back (very sharp guy). The pre-clinical data is interesting and it may have a shot at working in patients. Previous peptide vaccines were mostly T-cell vaccines, not B-cell vaccines, and so the approach is rational and novel. But a moderate polyclonal response in patients wont mean a therapeutic slam-dunk and it may well be that the best clinical trial to do is a combination of Herceptin plus HER-Vaxx, compared with a control arm of Herceptin (whether for breast cancer or gastric cancer). There is some evidence that a polyclonal response in addition to Herceptin gives a more durable response in pre-clinical models. It would also mean that the company would still be offering the “standard of care” therapy, meaning a better shot at some decent patient recruitment (and a generally more ethical trial design).

But again, $3m? Aint going to happen. Let’s also not forget that the HER-Vaxx construct is actually pretty complex and is costly to make (and the adjuvant strategy for the construct still needs a bit of a re-think in my opinion).

Paul Hopper is bright guy with a keen nose for an opportunity. Some of his opportunities, like Viralytics, are a bit “long in the tooth” but may yet still have their day (the VLA data is very nice). Others, like Polynoma I simply just don’t understand (currently running a huge Phase III study no less). But Imugene would have been a nice one to see properly funded, a bit of effort to put the story out there and at least $15-20m to build the foundation of a proper biotech company. Notwithstanding the current market volatility, I don’t see any reason why this couldn’t have been done. But instead, we have another underwhelming ASX financing that isn’t going to move the needle on the company.

It’s a shame, because it’s an interesting story. Unfortunately today’s financing announcement is basically nothing more than a dilution to existing shareholders with no associated value inflection.



7 thoughts on “Imugene’s Monster Raise

  1. So to summarise:
    1. They have a lack of funds (5 million dollars ain’t going to do much clinical research. They’ll need to raise more money next year).
    2. The unmet need is not that high (existing HER2 therapies are very effective)
    3. The competition would be intense (Roche/Genentech are a sophisticated commercial/R&D player)

    Conclusion: How did they convince people to give them 3 million dollars to burn?


    • Point 2 is interesting. Existing HER2 therapies are very effective in diseases such as HER2+ breast cancers where there is booming ErbB2 over-expression. On the other hand, Herceptin has shown almost no effect whatsoever in prostate cancer (I’m doing this from memory & don’t have the citation at hand…), where at most modest HER2 expression (no gene amplification) is still a poor prognostic marker. The idea of trying a polyclonal antibody instead of a monoclonal antibody in such cases seems obvious, at least with my 1980s understanding of immunology, but as the main article states for that amount of money, tell ’em they’re dreamin’…


      • Hi Gromit,

        To your first point – yes, the androgen axis is far more prevalent in prostate cancer and it is not clear that Her2 is functionality active. Plus, several meta-analyses have demonstrated that the “qualitative” nature of the assays used to evaluate Her2 expression have probably also confounded understanding of the role of this target in PCa. A nice overview can be found here.

        As for your 1980s understanding of immunology, my understanding is similar. I believe that the combined pertuzumab/trastuzumab (different Her2 epitopes) showed better performance than just trastuzumab alone. Also in animal models, anti-Her2 mAbs used in conjunction with a B-cell mediated polyclonal response also seemed to provide a more durable response. This probably reflects both the usual “heterogeneity” challenges of cancer, as well as the fact that target mutations create sub-populations of patients that are not responsive. Also, we know that eventually trastuzumab fails to elicit a reduction in receptor expression, which in turn means less ADCC cytotoxicity. These sorts of datapoints provide a strong hint that HER-Vaxx might not be a stupid idea.

        I am actually quite positive about Imugene’s technology, at least from what I have read/seen/heard. But your final words are the real issue. Dreamin’ indeed…


      • Found it! The meta analysis I was referring to can be found at & it shows a positive correlation between ‘over’-expression & Gleason score <7 in the primary tumour and both recurrence of androgen-independent disease and death. One patient out of 5,976 with a gene amplification event, meaning that whatever is going on, it isn't comparable to ErbB2 positive breast cancer. To cloud the issue further, Herceptin failed in a Phase IIa trial published in 2004 albeit with only 18 patients. Lapatinib (a dua ErbB1/ErbB2 inhibitor) also didn't lead to disease regression in a Phase II trial published in 2010.
        Final conclusion of the meta analysis paper is: "Further clinical trials should test the hypothesis that HER-2/neu is a marker of a clinically worse outcome in patients with prostate cancer and a potential target for therapy." I'm no longer following the field quite so closely so can't say if more has been published, but the failure of the small molecule inhibitor would suggest a polyclonal antibody might be the way to go, if this is indeed going to do something for those individuals who over-express the marker.
        All in all, the ASX announcement should have had an Everly Brothers sound track.


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