Immutep — A big year ahead for efti

Professor Adnan Khattak, consultant medical oncologist at Fiona Stanley Hospital and a principal investigator of the ongoing Phase I TACTI-mel study, provided an update on the trial in oral and poster presentations at the 33rd Annual Meeting of the Society for Immunotherapy of Cancer (SITC) in Washington, DC, earlier this month.

The response rate was consistent with previous reports, namely a 33% (6/18) overall response rate (ORR) from the start of efti/Keytruda combination therapy, and 61% (11/18) when measured from the start of the 12-week Keytruda monotherapy screening period. These are very encouraging results in a patient population in which 78% (14/18) subjects had M1c (late-stage) metastatic melanoma.

Importantly, the updated data in Exhibit 1 confirm that the tumor responses following efti/Keytruda combination therapy were long lasting. To highlight the new data, we have added green circles to the response plots for selected patients in Exhibit 1 to show the last data point included in the previous data set reported in the investor update in May. None of the patients who achieved a tumor response (50% shrinkage) has experienced significant tumor growth during the period of follow up.

It is interesting to note that one patient with stable disease has seen their tumor start to shrink, 12 months after starting therapy (indicated by a green arrow in Exhibit 1). There is the potential for this patient to develop into a late responder if tumor shrinkage continues.

Part A of the study tested three doses of efti (1, 6 and 30mg/kg) in combination with the anti-PD-1 immune checkpoint inhibitor Keytruda (pembrolizumab, Merck) in 18 patients with advanced melanoma who have had a suboptimal response to initial treatment with Keytruda. In Part A, efti/ Keytruda combination therapy was preceded by 12 weeks of Keytruda monotherapy.

Immutep has fully recruited the six-patient cohort that forms Part B of the study. These patients are treated with 30mg efti every two weeks starting at the same time as Keytruda therapy. No dose-limiting toxicities have been observed, which has given Immutep and collaborator Merck and Company confidence that this dose combination is safe to use in the upcoming TACTI-002 study.

No efficacy data from Part B have been reported to date. We expect final TACT-mel data, including Part B efficacy, to be reported in H119.

The company is finalizing its preparations for its TACTI-002 Phase II study in collaboration with Merck, which is on track to recruit the first subjects in early 2019.

TACTI-002 will evaluate efti plus Keytruda in up to 110 patients with NSCLC or SCCHN at 12–15 sites in the UK, Spain, the US and Australia. Treatment with efti (30mg by subcutaneous injection) will start on the same day as Keytruda treatment in this study, just like in TACTI-mel Part B.

The company presented details of the TACTI-002 trial design in a poster at SITC (Exhibit 2). Patients will receive 18 three-week cycles of efti/Keytruda combination therapy. For the first nine treatment cycles (27 weeks), patient will be injected with efti every two weeks. For the next nine cycles, efti will be administered every three weeks, to align with the Keytruda treatment regimen. At the completion of 54 weeks of combination therapy, patients can receive a further 12 months of Keytruda monotherapy.

The open-label TACT-002 study will utilize Simon’s two-stage design. For each of the three treatment indications, an initial cohort of 17–23 patients will be treated. For each indication, if the number of patients with tumor responses exceeds the threshold shown in Exhibit 3, additional patients will be recruited to take the total up to ~37 for that indication.

Part A will recruit first-line advanced/metastatic NSCLC patients, who are PD-1/L-1 naive and have not undergone systemic therapy for advanced/metastatic disease.

Part B will recruit second-line advanced/metastatic NSCLC patients who have experienced treatment failure (disease progression) following treatment with any PD-1/PD-L1 regimen.

Part C will recruit second-line SCCHN patients who are PD-1/L1 naive.

The primary endpoint will be ORR (as per irRECIST). The TACTI-002 study will make an important contribution towards building the evidence base to assess whether efti combo therapy can improve response rates to PD-1/L-1 therapy. First data are expected from mid-2019 onwards.

The AIPAC Phase IIb breast cancer study is over 70% recruited, with enrolment reaching 160 out of the target of 226 as of the AGM on 16 November. Recruitment passed the halfway mark (113/226) in June and reached 126 (56%) in early August. The company expects recruitment to continue into H119, and the event-driven PFS readout to report in H219 (after 152 PFS events).

The trial is testing the efti soluble LAG-3 fusion protein combined with paclitaxel in women with hormone receptor positive metastatic breast cancer who have not previously received chemotherapy for metastatic disease. The European Medicines Agency has indicated that this trial could be sufficient to support a marketing authorization if it achieves certain (undisclosed) clinical endpoints. A confirmatory Phase III study would likely be required before filing for approval in the US.

On 30 October Novartis disclosed it was culling 20% of programs from its pipeline to focus its resources on only the most cutting-edge drug candidates. This reduced its drug programs from 430 to 340. Although Novartis has not disclosed a list of the culled programs to the best of our knowledge, all indications are that development of LAG525, which it in-licensed from Immutep, is ongoing.

For example, while the presentation at the Novartis R&D day held the following week (on 5 November) did not specifically mention LAG525, development of its anti-PD-1 drug PDR0011 in multiple combinations in metastatic melanoma was listed among programs with anticipated filings in 2022 or later. In its Q318 results presentation on 18 October, this description referred to trial NCT03484923 in which PDR001 is being trialed in combination with LAG525 or either of two other drugs (Tafinlar or Mekinist) in advanced melanoma patients.

Although the R&D day presentation did not specifically mention the other PDR/LAG525 combination studies in other advanced cancers, including breast cancer, according to both the Novartis website and the clinicaltrials.gov database, four trials of LAG525 in combination with PDR001 are recruiting patients, as shown in Exhibit 4. Three of the four studies started recruiting patients in 2018.

LAG525 combo studies are ongoing, which indicates that Novartis considers it has the potential to change the standard of care in high burden disease areas. LAG525 inhibits LAG-3 signaling by blocking the binding of LAG-3 to the MHC class II molecule. Blockade of LAG-3 restores activity of effector T cells, reduces suppressor activity of regulatory T cells and enhances the anti-tumor activity of PD-1 inhibition.

Additional evidence supporting the potential efficacy of anti-PD-1/anti-LAG-3 combo therapy was presented by Novartis’s competitor Merck at SITC.

Merck reported results from a study of its MK-4280 anti-LAG-3 antibody +/- Keytruda in metastatic solid tumors where there was not a clinically effective alternative treatment (clinicaltrials.gov identifier NCT02720068). MK-4280 showed modest activity as a monotherapy (6% ORR, 1/18). The combination of MK-4280 with Keytruda showed promising efficacy, achieving a 27% ORR (4/15) in a range of solid tumors.

Last year BMS reported encouraging results from a Phase I study of its anti-LAG-3 antibody relatlimab (BMS-986016) in melanoma patients who had not responded to or had become resistant to checkpoint inhibitor therapies. In that study, 18% of LAG-3 positive patients responded to combination therapy with relatlimab plus Opdivo, vs a 5% response rate in patients with low tumor LAG-3 expression.2 BMS is undertaking a Phase III study of relatlimab plus Opdivo vs Opdivo alone in 700 patients with untreated advanced melanoma. Top-line results are expected in July 2020.

As we previously noted, Novartis itself reported3 encouraging signs of efficacy from the LAG525 in combination with PDR001 from the Phase I component of its ongoing Phase I/II study (NCT02460224) at ASCO in June. Among the 121 patients with solid tumors treated with LAG525 plus PDR001 at a wide range of doses there were 13 durable responses, including 3/84 mesothelioma patients and 2/5 triple-negative breast cancer patients.

We expect Novartis to continue to aggressively pursue its LAG525 clinical trial program as it seeks to ensure it does not allow BMS or Merck to gain a dominant position in the anti-LAG-3 antibody space.

It is important to note that although MK-4280, relatlimab and LAG525 all have a similar mechanism of action (blockade of the LAG-3 immune checkpoint), and are potential competitors to each other, they are not potential competitors to efti, which has a very different mechanism of action.

In September Immutep entered into a clinical trial collaboration and supply agreement with Merck KGaA/Pfizer to investigate the combination of its APC activator efti with their anti-PD-L1 immune checkpoint inhibitor avelumab (Bavencio) in patients with advanced solid tumors. Although avelumab gained FDA approval in 2017 for use in bladder cancer and in the aggressive skin cancer Merkel cell carcinoma, it has not yet been approved in any other cancers.

The study of avelumab plus subcutaneous (SC) efti in 12 patients with a range of advanced solid tumors will be included as an arm of the investigator-sponsored INSIGHT study (NCT03252938), which is underway at a single site in Germany. The combination would fit neatly into INSIGHT, which already includes arms investigating intra-tumoral and intraperitoneal administration of efti, as well as a third arm investigating SC efti in combination with chemo in solid tumors. The avelumab combination therapy arm (INSIGHT-004) is expected to start in Q119 and to report first data in mid-2019.

The principal investigator of the INSIGHT study, including the INSIGHT-004 arm, Professor Dr Salah-Eddin Al-Batran, is a member of Immutep’s clinical advisory board. The main INSIGHT study has already recruited 10 of the target of 38 patients; a status update is expected in coming months.

Immutep has started cell line development and the associated manufacturing steps for IMP761. IMP761 is the first known therapeutic antibody with agonist properties that enable it to activate the LAG-3 receptor on the surface of activated T cells, and thereby downregulate T cell activation and proliferation. In contrast, LAG525 and the other known anti-cancer LAG-3 antibodies are antagonist antibodies that block LAG-3 signaling and thereby prevent the downregulation of T cell immune responses.

The mechanism of action of IMP731 is also different to the company’s partnered IMP731/GSK2831781 cytotoxic antibody, which aims to treat autoimmune disease by killing LAG-3 positive T cells. IMP761 offers the opportunity to fine-tune immune responses, which could benefit sufferers of autoimmune diseases by temporarily switching off activated LAG-3 positive T cells that are damaging tissue or causing inflammation.

Immutep reported in September that preclinical studies of IMP761 in cynomolgus monkeys produced encouraging results that demonstrate the immunosuppressive activity of IMP761 in vivo. Immutep intends to present the preclinical results at a future scientific conference.

We maintain our valuation of Immutep at $387m, which is equivalent to $12.57 per ADR on an undiluted basis. On a fully diluted basis our valuation is $9.05 per ADR, after taking into account the options, warrants and convertible notes on issue. Exhibit 5 summarizes the constituent parts of our valuation, which is based on a discount rate of 12.5%. Our valuation assumptions and financial forecasts are unchanged.

Exhibit 6 shows that in addition to the 3,081m Immutep shares in issue, there are a further 1,498m potential shares that could be issued on the exercise of options, warrants, performance rights and convertible notes, all of which would be in the money at our $12.57 per ADR undiluted valuation. Exhibit 6 shows that after taking into account these potential shares, our diluted valuation is $9.05 per ADR. Depending on trial progress and the timing of milestone payments from partners, Immutep may require additional funding to complete the efti clinical trials; our diluted valuation of $9.05 per ADR does not take into account potential dilution from any future capital raising.

We include risk-adjusted milestones payable by current partners GSK for IMP731 and Novartis for IMP701, plus milestones from prospective deals for efti. The breadth of the LAG-3 pipeline means there could be further upside if Immutep or its partners launch additional products into the clinic or broaden the indications being studied.