Immix Biopharma — A step toward delivering a practical CAR-T option

Immix has released updated data for its lead CAR-T asset, NXC-201, from the ongoing Phase Ib/II NEXICART-1 study (n=72 to date). The clinical update contains data from 63 MM patients, including 13 new patients (since its last update), as well as follow-up data on 50 patients already enrolled. We note that this figure includes all participants in the dose escalation study at all tested doses: 150m cells (n=6), 450m cells (n=7) and 800m cells (n=50); and the ORRs for each of these dose levels were 50%, 86% and 90%, respectively.

For MM, as of the data cut-off point of 17 July 2023 (median follow-up of 11.9 months), for the 50 r/r MM patients at the RP2D of 800m cells, the results were as follows:

We believe these data demonstrate that NXC-201 could provide MM patients, especially those who have not been exposed to prior BCMA-targeted therapies, with an important treatment option. While we caution against direct read across between clinical trials (given possible differences in study populations, protocols, centers and other factors), we note that BMS’s Abecma showed an ORR of 73% in the pivotal KarMMa-3 study. We look forward to the next steps in this clinical program, and note that NXC-201 gained Orphan Drug designation (ODD) from the FDA in MM. Immix also recently announced the completion of the second NXC-201 engineering batch at its US CAR-T manufacturing site, offering the potential to expand the ongoing NEXICART-1 trial to clinical trial sites in the US. Management has communicated that it plans to submit a BLA in MM to the FDA once 100 patients have been treated with NXC-201.

Management also announced updated data for the nine ALA patients enrolled, in a separate release. All patients had been heavily pre-treated with J&J’s Darzalex (daratumumab, a monoclonal antibody therapy), and there was a median of six prior lines of therapy that had failed to stop the worsening of disease. As of the data cut-off point of 20 September 2023 (median follow-up of 7.3 months), the results were as follows:

(Note: MRD refers to measurable residual disease, in this indicating that the ratio of cancer cells to healthy cells was as low as 10-5:1).

We view these data as a positive clinical development for NXC-201 and note that there are currently no approved drugs for r/r ALA, offering a significant opportunity for Immix, in our view. We note that the FDA has also granted ODD to NXC-201 in ALA. The orphan status in both MM and AA offers the company up to seven years of US market exclusivity in each indication, provided it is successful with regulatory approval. Management plans to submit a BLA in ALA once 40 patients have been treated with the CAR-T therapy.

An important feature of NXC-201 for the treatment of ALA is the apparent ability to rapidly eliminate disease-causing amyloid chains, measured using an ALA disease severity marker (Exhibit 3). These data show clearance within c 30 days after administration of treatment, which management believes could potentially reduce the risk, onset or duration of certain side effects (such as neurotoxicity or CRS), suggesting that NXC-201 may find application in the outpatient setting.

As a reminder, NXC-201 is being developed by majority-owned (94%) subsidiary Nexcella. The ongoing NEXICART-1 trial (NCT04720313) is a Phase Ib/II open-label study assessing the safety and efficacy of NXC-201 in adults with r/r MM and ALA. The primary objective of the Phase Ib portion of the clinical trial was to characterize the safety and confirm the RP2D of NXC-201. Dose escalation levels included: 150m cells (n=6), 450m cells (n=7) and 800m cells (dose expansion cohort, n=29); the RP2D was identified as 800m cells and all patients continued into the Phase II portion of the study. The expected primary endpoint of the Phase II portion, which is evaluating the safety and efficacy of NXC-201 at the RP2D, is ORR and duration of response.

CAR-T therapies harness the natural function of T cells (white blood cells that play an important role in our immune systems). T cells work by detecting foreign materials in the body (such as viruses or cancers). More specifically, they recognize aberrant proteins expressed on the surface of cells (antigens) and trigger an immune response to destroy the targeted cell. However, tumors can prevent this natural process by disguising these surface proteins and suppress the function of certain T cells. CAR-T therapies are developed by genetically engineering the T cells of a patient to span the cell membrane and bind to specific structures at the surface of cancer cells. Once bound, the T cells become activated, initiating the targeted destruction of the cancer cells. For a broader discussion on cell and gene therapies, we direct readers to our Edison themes note on the subject.

The current standard of care for MM typically involves a combination of chemotherapy (such as proteasome inhibitors), immunomodulatory agents and steroids, for newly diagnosed patients. In the later-line setting, we are seeing more targeted approaches emerge from the clinic, providing treatment options to address disease relapse. A number of these technologies target BCMA, offering clinical validation for Immix’s approach with NXC-201, in our view (Exhibit 4).

However, more generally, we note that currently approved CAR-T therapies are hindered by manufacturing bottlenecks (time and cost), and safety concerns relating to high-grade CRS, an acute inflammatory syndrome associated with CAR-T therapies characterized by fever, organ dysfunction and neurotoxicity. Due to these challenges, CAR-T therapies have limited patient access in the US. According to management, it is estimated that the proportion of US hospitals capable of administering such treatments is as low as 5%, limited to large-sized hospitals in large metropolitan regions. However, the need to increase the number of centers that can administer CAR-T therapies is recognized in the healthcare community, as patients currently have long travel times to access this type of treatment, and have to spend many days at these centers for monitoring. Immix’s management attests that this is where NXC-201 can offer a competitive edge, as potentially the first outpatient CAR-T therapy. This could significantly broaden patient access as it could be made available at more US hospitals or treatment sites, beyond large hospitals in major cities, without the requirement for long-term monitoring after administration (Exhibit 5).

While CAR-T therapies have the potential to provide an effective treatment option against challenging diseases, currently approved CAR-T therapies are not considered outpatient treatments due to the risk of serious side effects. One of the most frequent side effects is CRS, symptoms for which include fever, dizziness due to low blood pressure, and difficulty breathing. As part of our immune systems, the release of cytokines from T cells is a natural process. However, as CAR-T therapies stimulate the immune system to increase cytokine production, CRS is an inherent risk. The other commonly observed side effect is neurotoxicity, characterized by sever confusion, seizure-like activity, and impaired speech. While the precise cause of these neurological side effects has not been fully elucidated, it represents a safety concern associated with this type of treatment, and hence, patients must monitored for at least two weeks after being administered with a CAR-T therapy. The basis for NXC-201 as potentially the first outpatient CAR-T therapy revolves around the reduced risk of neurotoxicity and CRS, as according to the reported data to date, it has a competitive edge when compared to J&J’s Carvykti, and BMS’s Abecma, as well as Arcellx’s CAR-T in clinical development for MM (Exhibit 6).

NXC-201 has shown significantly low neurotoxicity of 4% in two cases (grade 1 and 2) out of 50 points at 800m cells for MM patients and no patient deaths reported to date, offering a superior safety profile, in our view, compared to alternative treatment options with 9–23% neurotoxicity. Importantly, NXC-201 also has the potential to be associated with short hospital stays of around three days due to this reduced risk of safety concerns, in contrast to c 14 days for currently approved CAR-T therapies. This advantage is also driven by comparatively more manageable cases of CRS, attributed to the treatment’s rapid mechanism of action (Exhibit 7). In contrast to approved CAR-T therapies for MM, for NXC-201 there have been no high-grade (>grade 3) cases of CRS, and where lower grade CRS events have occurred, this has been associated with fast onsets, meaning that the side effect may be treated more promptly, still mitigating the requirement for long hospital stays, offering outpatient potential. While we caution direct read across, key benefits of NXC-201 (according to data compiled by management) include:

Based on Q223 results, our operating expenses estimates for FY23 and FY24 were adjusted in our prior note. However, our long-term assumptions for the company remained unchanged. We note that Immix raised $10m ($9.55m in net proceeds) through a private placement (August 2023) by issuing 3,241,076 shares at an issue price of $1.94 per share. Additionally, these shares were accompanied by 1,913,661 pre-funded warrants at an exercise price of $0.0001/share lower than the purchase price ($1.94) of newly issued shares. We have incorporated the raised cash into our FY23 estimates and, due to the increased number of shares outstanding, our adjusted EPS loss estimates for FY23 and FY24 are now $0.72 and $0.81, versus $0.84 and $0.97 previously in the respective periods.

As we update our net cash balance for the recent $9.55m fund raise through a private placement in August 2023, our valuation has increased to $90.7m, from $81.1m previously. However, our per-share valuation has decreased to $4.2 per share, compared to $5.0 per share previously, reflecting the higher number of shares outstanding at 21.4m (versus 16.3m earlier) due to newly issued shares as part of recent fund raise and assuming full conversion of the 1.9m prefunded warrants issued in August 2023. Based on our cash burn projections for FY23 and FY24, our estimated operating cash runway for the company extends into Q424 (Q224 previously). Based on its current funding status, we project that Immix will need to raise a further $10m ($20m previously) before end-FY24 prior to the projected global licensing deal in FY25. This $10m fund requirement has been accounted for as illustrative debt in our model. Alternatively, if the funding is instead realized through an equity issue (assumed at the current trading price of $3.87/share), Immix would have to issue 2.8m shares, resulting in our per-share valuation decreasing to $4.1 from $4.2 currently (the number of shares outstanding would increase from 21.4m to 24.3m).