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Adaptimmune (NASDAQ:ADAP), I noted previously, had been a stagnant stock for long due to a lack of clarity surrounding the BLA submission of its lead asset afami-cel. However, the stock is now up 20% since my last, mainly because of an update from the company that says they will start a rolling BLA this quarter, and complete it by mid-2023. So now we have a date.
Afami-cel is an engineered T-cell therapy targeting synovial sarcoma and MRCLS or Myxoid/round cell liposarcoma, both solid tumor indications. They ran a trial called SPEARHEAD-1, which saw a 34% response rate, well above the historical threshold of 18%. However, durability was a concern. More data is needed to understand if there’s a major concern, or not, and whether this will beat the known PFS/OS seen in this patient population. Note that data presented at the Connective Tissue Oncology Society (CTOS) annual meeting on November 18th saw a median duration of 50.3 weeks.
The other problem is that these two target indications are very small markets, almost minuscule in their $100mn glory. I discussed that in my earlier piece; here’s the bright side, though. $100mn is not the end of it for ADAP, but just the beginning. Their existing pipeline of the MAGE-A4 first-generation platform assets itself is worth 40 times more than that, and they got more up their sleeves. And, in a way, it is good to start out small; there’s less competition there, so they can get their proof of concept through the FDA’s door. In my experience, once you have seen the other end of that door, things become easier. Relatively speaking.
The company is trying out adding an AKT inhibitor (AKTi) during the manufacture of afami-cel (ADP-A2M4). This can remodel gene expression towards better proliferation or better cytotoxicity, which increases durability of response. However, the BLA data is not going to include this, which is basically data they presented from the SURPASS trial at the SITC in 2021.
They presented more data from the SURPASS trial in September. Data showed:
– 44% Objective Response Rate (ORR) with a single dose of ADP-A2M4CD8 in 25 heavily pre-treated patients with late-stage ovarian, urothelial, and head & neck cancers –
– Further clinical development planned in ovarian (SURPASS-3), urothelial, and head & neck cancers –
– Across all tumor types in the SURPASS trial, responses observed in five solid tumor types in 43 heavily pre-treated patients with an ORR of 33% –
– Across non-sarcoma tumors, significantly higher response rates compared with the first-generation MAGE-A4 targeted product (afami-cel) –
– Among adverse events (AES’) of special interest: 32 people (73%) had cytokine release syndrome (CRS’); most events were low grade and resolved (~86% ≤ Grade 2). Eleven people (25%) had cytopenia (Grade ≥3) at 4 weeks after treatment. Three people (7%) had Immune effector Cell-Associated Neurotoxicity Syndrome (ICANS) related to ADP-A2M4CD8.
– There were 2 deaths reported as related to ADP-A2M4CD8 by investigators. A 60-year-old woman with ovarian cancer with a large tumor burden in her lungs died due to pneumonia and CRS. As reported at ESMO 2021, a 71-year-old man with adenocarcinoma of the esophagus and a history of chronic anemia died due to bone marrow failure.
Key points to note here are that the response rates were higher (differentiated) from earlier generation MAGE-A4 targeted products like afami-cel. Also, note that these were heavily pretreated solid tumor patients for whom there is virtually little option left. These were patients who had received a median of 3 prior lines of therapy (range 1-8). Median duration of response was 12 weeks, with a range of 7 to 65 weeks by the August cutoff date in 43 evaluable patients, on a single infusion. This population of ovarian cancer patients who are platinum-resistant have very limited options, with, as the company states, “overall response rates of less than 13% with currently approved therapies, median progression-free survival of less than 4 months and median overall survival of 13 months or less.”
The company provided a lot of detail about the unmet need and market size in these solid tumor indications. Note also that in November, the company provided updated data from this trial – here – which sowed increased durability and response rates.
In what some would consider a setback to Adaptimmune, GSK will transfer its NY-ESO cell therapy program and the right to the PRAME cell therapy program to Adaptimmune. ADAP and GSK signed a deal for these programs way back in 2014, for which, I see from a 2017 report, GSK paid ADAP $63mn. Here’s some background on why the deal was cancelled:
According to Lyell, GSK’s decision stemmed from disappointing data for a therapy known as lete-cel, which the drugmaker has been developing with Adaptimmune since 2014 and licensed in 2017. The treatment was recently one of GSK’s top cancer drug prospects, in development for synovial sarcoma, lung cancers and other solid tumors. It’s meant to work by genetically modifying cells to detect NY-ESO, a protein expressed on several types of tumors.
Lyell, the company named here, also had a deal with GSK for a newer type of NY-ESO cell therapy, and another with Immunocore for the same target. GSK dumped all three companies after not seeing adequate clinical activity in a late-stage lung cancer trial. ADAP has a different take on this, but GSK’s statements do not support that.
In this regard, here’s what they said at the earnings call:
On the reasons behind that, I think you’ll have to refer to GSK’s statements on their portfolio prioritization. All I can say is that we are delighted that their strategic decision has resulted in such credible programs returning to their mothership. And then in terms of development, I think I mentioned it earlier, we are looking forward to putting the PRAME program into the clinic and it should be IND ready next year. And we think that is a very significant target and I think that is a view generally held by others in the field as well. So, we’re very excited about that.
With respect to lete-cel, we need to understand both the terms of the transition back from GSK and ultimately the data arising from the trials that they’ve conducted in order to be able to turn in next steps before lete-cel.
Do note that this deal cancellation follows the departure from GSK of R&D chief Hal Barron, M.D., who was instrumental in signing this deal with Adaptimmune. Also, note that ADAP will advance the PRAME program to an IND stage next year.
In another little problem for ADAP, a cell line for its allogeneic therapy program saw a chromosomal abnormality in November. As the company states:
The Company has taken the decision to change the cell line being used to develop its MAGE-A4 allogeneic cell therapy. This change was due to the presence of a chromosomal abnormality in the original cell line and will delay the timing of the first allogeneic IND submission to 2025. This cell line is not used in any of the Company’s partnered programs.
According to Evaluate, this has pushed back the IND (“expected clinical trial readiness of the program”) by 2 years.
Financials
ADAP has a market cap of $294mn and a cash balance of $79mn. They had revenue of $7mn as well. Annual operating expenses were $50mn, so they are in a precarious cash position. They do have marketable securities of another $120mn. The company de-prioritized some of its non-core programs and undertook a major restructuring, reducing headcount by between 25 and 30%. This, they say, will extend their cash runway to 2025.
Bottom Line
ADAP is at a critical stage in its life. It is hemmed in from all sides by bad news and trouble. The afami-cel program is its immediate lifeline. Those may be small markets, but if it succeeds, it can get some traction to progress its SURPASS trial, which is much more promising. If it fails, it’s going to be the end of the line for this company. I have no advice on how to play this. If you are a risk-taker, you will look at the bright side, which is a major upside from current prices if the BLA gets approved by the end of next year.
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