OSE Immunotherapeutics — Encouraging data from novel preclinical projects

OSE’s new preclinical data describing the discovery of a novel myeloid immune checkpoint target for cancer immunotherapy were accepted for poster and oral presentations at AACR Virtual Annual Meeting II, 22–24 June 2020. In collaboration with researchers at the Center for Research in Transplantation and Immunology, Nantes University Hospital, OSE found that CLEC-1 acts as myeloid checkpoint.

Hematopoietic stem cells are able to differentiate into cells of two primary lineages, lymphoid and myeloid. Cells of the lymphoid lineage include B cells, T cells and natural killer cells. Cells of the myeloid lineage include megakaryocytes, erythrocytes, granulocytes, dendritic cells and macrophages. Although the research is still early, myeloid CPIs are believed to work in a similar way as T cell CPIs, but instead of T cells such drugs inhibit the checkpoints between tumour cells and myeloid cells.

With its collaborators OSE found that tumour cells inhibit myeloid cell phagocytosis through CLEC-1. In other words, CLEC-1 acts as a ‘don’t eat me’ signal. Anti-CLEC-1 antibodies developed by OSE restored the phagocytosis function of macrophages and dendritic cells, which recognise the cancer cells as foreign then attack and digest them. This leads to the presentation of cancer antigens on the cell surface, which stimulates the immune system. Mice that were genetically engineered to be CLEC-1 deficient were able to eradicate tumour cells more effectively. A synergy with chemotherapy in CLEC-1-deficient mice was also observed.

OSE already has an asset in Phase I stage, OSE-172, which is a first-in-class signal regulatory peptide alpha (SIRPα) antagonist. OSE-172 binds to SIRPα on myeloid cells, which inhibits the SIRPα/CD47 interaction (CD47 is found on the surface of cancer cells). CD47 also acts as ‘a don't eat me’ signal to macrophages of the immune system. When the SIRPα/CD47 axis is blocked, the expectation is, as with CLEC-1, the myeloid cells recognise the cancer cells as foreign so they attack and digest them. Phagocytosis leads to cancer-antigen presentation on the cell surface, which stimulates the cancer-specific immune system. OSE licensed OSE-172 to BI in April 2018; this is the company’s largest deal with €1.1bn potential development, regulatory and sales milestones plus low double-digit royalties.

No myeloid checkpoint inhibitors have been approved yet. Most advanced projects are in early- to mid-clinical stages and target the SIRPα/CD47 axis, primarily CD47 (present in tumour cells). In our initiation report (December 2018), we identified US-based biotech Forty Seven as the leader in the myeloid CPI space with the anti-CD47 antibody magrolimab targeting myelodysplastic syndrome (MDS), acute myeloid leukaemia (AML) and diffuse large B-cell lymphoma. As reported in March 2020, Gilead Sciences agreed to acquire Forty Seven for $4.9bn and completed this in April. Promising results from just a Phase Ib study with magrolimab in MDS and AML patients were sufficient to convince Gilead to pay the hefty premium (92% to share price before the deal).

So, myeloid checkpoint inhibition is increasingly attracting attention after T-cell CPIs became the mainstay treatment in many oncological indications. OSE has now identified a second potential myeloid checkpoint target. Although the data presented at the AACR are still early, it is cutting-edge research enabled by OSE’s extended network with academic research groups.

Another major new data presentation at the AACR was from OSE’s BiCKI platform. OSE revealed the platform in March 2019 and we reviewed it in our September 2019 report. At the AACR last month, OSE presented two posters: one focusing on the development of the platform itself, and a second on with new preclinical data with the first potential asset from this platform.

BiCKI is a bispecific/fusion antibody platform (Exhibit 1A) that consists of:

CPIs have become a standard of care for many cancers. Although in some patients CPIs are remarkably effective, a significant percentage (depending on the cancer type) of patients either do not respond to treatment (primary resistance) or develop resistance after an initial period or response (secondary resistance). OSE hopes that anti-PD-1 bispecifics will help overcome the resistance (primary and secondary) to anti-PD-1 drugs by selecting targets that are involved in different stages of the immunity cycle. In particular, OSE is looking for targets that have synergistic potential.

BiCKI IL-7: First potential bispecific drug candidate

Persisting antigenic stimulation, such as in chronic infections and cancer, can lead to T cell exhaustion, a state of functional impairment, high expression of inhibitory receptors including Programmed Death-1 (PD-1) and defective immune memory (Wherry and Kurachi, 2015). This dampens the immune response. Blocking the PD-1:PD-L1 pathway can reinvigorate exhausted CD8+ T cells, improving viral and tumour control. This strategy has now been proven with the advent of CPIs; however, the primary and secondary resistance rates are high, as mentioned above.

OSE’s first candidate based on this platform is BiCKI IL-7 (Exhibit 1B). IL-7 is a cytokine that controls the proliferation, apoptosis and activation of CD4+ and CD8+ T cells in humans. IL-7 receptor expression is reduced in exhausted T cells. In an in vitro chronic antigenic stimulation model, OSE has demonstrated that BiCKI IL-7 reinvigorated exhausted T cells (Exhibit 2A).

Another reason why OSE chose the combination of BiCKI and IL-7 was that IL-7 is a good target for stimulating effector (CD8+, CD4+) T cell function over regulatory T cells (Tregs). Tregs are known to contribute to the dampening of the anti-tumour immune response. This is because effector T cells express high levels of IL-7 receptors, while Tregs express low levels. As a result, BiCKI IL-7 tilts the balance towards effector T-cells over Tregs (Exhibit 2B).

OSE also showed that the advantage of the bispecific drug (over a combination of two drugs, anti-PD-1 with IL-7) is that BiCKI IL-7 synergistically increases T-cell receptor signalling and hence antigen-specific T cell responses.

Large biotech/pharma are getting in early on bispecifics

The bispecifics field is a relatively new area but is receiving growing attention. Three bispecific antibodies have been approved (they do not target checkpoint receptors): Blincyto (blinatumomab, Amgen), Hemlibra (emicizumab, Roche) and Removab (catumaxomab, Fresenius, now withdrawn) but there are many more in clinical stages. There are a few companies trying to use bispecifics to target multiple checkpoints with the aim of further reducing any T-cell inhibition by tumour cells and promoting T-cell activation.

Most of the programmes are still early to mid-stage so existing deals involve bispecific platforms or very early-stage assets (Exhibit 3). These deals achieved between $45–150m in upfront payments and $180–1,700m in milestone payments (for the platform plus existing programmes), depending on the number of candidates included in the deal. As there is an appetite for bispecifics platforms and bispecific candidates from pharma, OSE’s decision to invest in BiCKI seems well founded.

Clinical programme update and upcoming newsflow

Our up-to-date review of the developments with OSE’s clinical-stage assets can be found in the reports published in March and April 2020.

Our valuation of OSE is unchanged at €230m or €15.3/share. OSE will report H120 financial results in September 2020. In May 2020, OSE signed a €7m loan agreement with a consortium of banks, 90% guaranteed by the French government as support during the ongoing COVID-19 pandemic. According to OSE, this has extended the cash runway until Q321. The initial maturity period is 12 months, which OSE can extend for another five years.

We do not yet include any assets from the BiCKI platform, as the research is at an early, preclinical stage. However, OSE is developing this platform relatively quickly, so we will review potential assets once the platform has matured.