Immix Biopharma — Full steam ahead with US CAR-T trial

Q224 was an active period for Immix, with intensive preparatory work for the initiation of the US-based NEXICART-2 trial allowing for the first patient dosing in July 2024 (consistent with the previously communicated mid-2024 target). As a reminder, the NEXICART-2 trial is a follow-up study to the ongoing NEXICART-1 study, which was based in Israel, but with the trial design and patient profiling optimized (based on key takeaways from NEXICART-1) to ensure the maximum likelihood of patient benefit and trial success. The choice of r/r ALA as the target indication is also strategic, in our opinion, given the limited treatment options and lack of CAR-Ts being developed for this indication, providing a greenfield opportunity to Immix.

ALA is a rare condition (incidence of c 4,000 per year in the US, c 75% of which are r/r), characterized by misfolded amyloid proteins, which accumulate around tissues and organs, hindering their function. The standard of care includes autologous stem cell transplant or a combination of daratumumab (a CD-38 targeting monoclonal antibody) and CyBorD (chemotherapy agents cyclophosphamide, bortezomib and dexamethasone), but relapse remains an ongoing medical challenge. While B-cell maturation antigen (BCMA)-targeting CAR-T therapies such as NXC-201 are gaining popularity as a viable treatment option for certain conditions (Bristol Myers Squibb’s (BMS’s) Abecma and Johnson & Johnson’s (J&J’s) Carvykti are BCMA-targeting therapies approved for the treatment of multiple myeloma), the side-effect profile of such treatments limits wider applicability, particularly in indications with fragile patient populations, such as ALA. However, clinical trials to date for NXC-201 have demonstrated a desirable safety profile (1–2 day cytokine release syndrome (CRS), as discussed here, versus 4–8 days for currently approved CAR-Ts).

Exhibit 1 presents an overview of Immix’s CAR-T pipeline.

NEXICART-2 is a Phase Ib open-label, single-arm, multi-site dose escalation/dose expansion study, aiming to test the safety and efficacy of NXC-201. Based on data analyses from NEXICART-1, the US-based study aims to recruit up to 40 patients with r/r ALA (without concomitant multiple myeloma) with adequate cardiac function (by excluding patients with Mayo stage 3b ALA or New York Heart Association stage 3 or 4 heart failure) and who have not received prior BCMA-targeting treatments. We remind readers that of the 13 ALA patients in NEXICART-1, for whom the trial data were presented at the American Society of Gene and Cell Therapy (ASGCT) 27th Annual Meeting, five had NYHA stage III/IV heart failure, and five had Mayo stage 3 ALA (the overlap between both groups was not specified). Management expects improved outcomes for patients with better cardiac function, as reflected with the updated trial design. We highlight that despite the more fragile nature of the patient population in NEXICART-1, an overall response rate (ORR) of 92% and a complete response (CR) rate of 75% were achieved, adding confidence to the potential outcome of the NEXICART-2 trial, in our view. (The latest clinical data are discussed in further detail in our prior update note.)

The first dose escalation portion of NEXICART-2 will evaluate two doses (150m CAR-T cells and 450m CAR-T cells) across two cohorts of three patients, with the potential to increase dosing to 800m CAR-T cells in the expansion phase, provided the initial doses are deemed safe. The study will determine the maximum tolerated and recommended Phase II dose, while also evaluating efficacy signals (ORR and CR rate). We note that these doses were all tested successfully in NEXICART-1. For NEXICART-2, Immix aims to complete patient enrolment within 18–24 months with top-line readouts guided in Q2/Q326. Management plans to share an initial data readout in Q424, and a further interim readout in mid-2025, both of which could potentially be major catalysts. In our view, the overriding goal of the US trial will be to improve upon (or at least reproduce) the results seen in NEXICART-1.

Despite the headwinds faced by CAR-T therapies after the requirement for black box warnings on current approved products due to risk of secondary malignancies, Immix has assured the market that it has not seen such malignancies in the clinical data to date for NXC-201. Moreover, the FDA indicates that it believes the benefits outweigh the risks, exemplified by its approval to move BMS’s Abecma and J&J/Legend’s Carvykti to earlier-line treatment settings. We also highlight that recent research has characterized the risk of these secondary malignancies as low.

In general, side effects represent a key risk in the development of CAR-T therapies, arguably more so than many other technologies in clinical development. This was recently exemplified with Galapagos having to pause its Phase II BCMA-targeting CAR-T trial, due to the observation of a Parkinsonism adverse event, which has also been seen in recipients of BMS’s and J&J’s BCMA-targeting CAR-T therapies. We believe Immix may be able to offer safety-based differentiation with NXC-201, based on the reported clinical data to date. In addition to the efficacy results discussed above, the company has reported zero cases of neurotoxicity and that cases of CRS showed a low median duration of two days. In our view, NXC-201 has the potential to address the safety limitations of current approved CAR-T therapies, positioning NXC-201 as a possible out-patient treatment.

In July 2024, Immix was awarded an $8m grant from the CIRM to advance the clinical development of NXC-201 for the treatment of r/r ALA. The CIRM is a state-funded agency supporting innovation in the field of cell therapies, and we see this as encouraging recognition of Immix’s efforts in the CAR-T space. Moreover, the cash injection should support ongoing clinical activity for NXC-201 and enhance the cash runway by around six months, per our calculations (from Q225 to Q425). However, we note that the payout will be contingent on the company achieving certain clinical milestones, primarily pertaining to patient enrolment in the clinical trials for NXC-201. The company expects to start receiving the funds from September 2024.

While ALA remains the near-term priority for Immix, as part of its strategy to focus on indications not currently targeted by CAR-Ts, management has indicated its intention to target additional autoimmune conditions as a strategic area of interest. While we await an update on the additional selected autoimmune indications (expected to be announced by end-2024), we note that the company is planning single-arm, open-label trials across two unaddressed (and currently undisclosed) autoimmune indications with interim data expected to be reported in Q425. Autoimmune conditions are widely regarded as the next frontier for CAR-T treatments, which, in addition to Immix’s progress in ALA, has been recently explored with an allogeneic CAR-T therapy, based on a study conducted in China and published in Cell. We await further details from management on its plans in this area.

Immix’s Q224 results were unsurprising, reflecting the company’s efforts towards ramping up clinical activity in the US. The operating loss for the quarter was $4.7m, up 26.4% y-o-y ($3.7m in Q223), although lower than the Q124 figure of $5.6m. Q224 R&D expenses of $2.2m were notably lower than Q124 ($3.2m), which we believe was due to reduced NEXICART-1 activity. With the commencement of patient enrollment for NEXICART-2, we expect this figure to rise in the coming quarters. G&A expenses were $2.5m, up 64% y-o-y, but in line with the numbers recorded in the previous two quarters. The increase was related primarily to higher fees for investor relations ($322.7k), stock-based compensation ($236.2k) and employee compensation ($189.3k). Free cash outflow for the quarter was $5.4m, reflecting the operating performance.

We have adjusted our FY24 and FY25 top-line estimates to reflect the potential inflows from the CIRM grant payment. Management expects the receipts to flow in from September 2024 and we estimate a total of $2m will be received in H224, with the remaining $6m in 2025. We keep our R&D and G&A estimates unchanged, expecting an increase in R&D expenses in H224 ($8.0m vs $5.5m in H124). Overall, our revised operating loss estimates for FY24 and FY25 are $20.0m and $20.2m, respectively (previously $22.0m and $26.2m).

We continue to value Immix using a risk-adjusted net present value (rNPV) approach for all assets in clinical development. As previously noted, the near-term development focus for the company will be NXC-201 in r/r ALA, for which there has been a minor shift in reported timelines. Management now expects patient enrollment to be completed within 18–24 months (vs 18 months previously). Immix’s update also states that top-line results can be expected in Q2/Q326 (vs our previous assumption of early-2026). Accounting for the additional time required to prepare the data package for FDA submission and launch preparations (if approved), we have conservatively adjusted our launch timelines for NXC-201 to 2028 (from 2027 previously). Accordingly, we now estimate a partnership deal to be signed in 2027 (vs 2026 previously), although we keep the assumed deal terms unchanged for now. Our revised rNPV for NXC-201 in ALA stands at $37.1m (vs $45.4m previously).

For the other programs, our valuation remains broadly unchanged. While we currently maintain our existing timelines on the other programs (NXC-201 in multiple myeloma and IMX-110 in soft tissue sarcomas and solid tumors), we will revisit our assumptions based on future updates from management on their development plans. We also await further information on the selected additional autoimmune indications for NXC-201 before incorporating them in our valuation, which could provide upside.

Reflecting the aforementioned changes to the NXC-201 launch timeline and the lower period-ending net cash position ($24.0m at Q224 vs $29.3m in our last note), we adjust our valuation for Immix to $123.1m (from $139.5m previously). In addition to this, our per-share valuation is affected by the higher share count (27.5m vs 26.4m previously), resetting at $4.5/share (vs $5.3/share previously). Exhibit 2 presents a breakdown of our rNPV valuation for Immix.

We expect the period end cash balance of $24m to be bolstered by the potential receipt of the $8m grant income from CIRM, extending the cash runway by another six months to Q425 (vs Q225 previously) based on our projected cash burn rates. We forecast that the company will raise $5m in H225, and another $10m in 2026, before signing a partnership deal in 2027 with the associated capital injection. Should such a deal not take place, we estimate that the company would need to raise another $10m in FY27, before turning cash flow positive in FY28 following the potential launch of NXC-201 in ALA. If Immix were to raise these funds (a total of $25m across FY25–27) through equity issuance, it would need to issue 13.4m shares (assuming a conversion price of $1.86, based on the last closing price), and our valuation would decrease to $3.6/share (from $4.5/share currently), and the number of shares outstanding would increase to 40.9m from 27.5m currently.