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Last close As at 09/06/2023
USD1.31
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Market capitalisation
USD21m
Research: Healthcare
Context Therapeutics’ R&D webinar covered key takeaways from its five posters presented at the AACR Annual Meeting in April 2022. While the results reiterated the potential benefits of ONA-XR with standard-of-care treatment, the notable highlight was the possible combination with checkpoint inhibitors (turning ‘immunologically cold tumors hot’) and the Aurora A/STAT3 oncogenic signaling pathway (implicated in resistance to endocrine treatment) for treatment of hormone-driven cancers. Beyond ONA-XR, preclinical data presented on the CLDN6xCD3 library reasserted the higher selectivity of Context’s pipeline for CLDN6 (versus competitors), with the final clinical candidate expected to be selected by H222.
Context Therapeutics |
R&D webinar highlights pipeline potential |
R&D update |
Pharma & biotech |
22 April 2022 |
Share price performance
Business description
Next events
Analyst
Context Therapeutics is a research client of Edison Investment Research Limited |
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Context Therapeutics’ R&D webinar covered key takeaways from its five posters presented at the AACR Annual Meeting in April 2022. While the results reiterated the potential benefits of ONA-XR with standard-of-care treatment, the notable highlight was the possible combination with checkpoint inhibitors (turning ‘immunologically cold tumors hot’) and the Aurora A/STAT3 oncogenic signaling pathway (implicated in resistance to endocrine treatment) for treatment of hormone-driven cancers. Beyond ONA-XR, preclinical data presented on the CLDN6xCD3 library reasserted the higher selectivity of Context’s pipeline for CLDN6 (versus competitors), with the final clinical candidate expected to be selected by H222.
Year end |
Revenue ($m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/20 |
0.0 |
(3.2) |
(9.28) |
0.0 |
N/A |
N/A |
12/21 |
0.0 |
(10.6) |
(3.74) |
0.0 |
N/A |
N/A |
12/22e |
0.0 |
(16.1) |
(1.01) |
0.0 |
N/A |
N/A |
12/23e |
0.0 |
(22.3) |
(1.40) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalized, excluding exceptional items.
Potential combinations widen ONA-XR’s playing field
The overriding theme of the three posters presented on ONA-XR was the drug’s potential therapeutic efficacy and utility as a combination therapy in hormone-driven cancers, either with the current standard of care (SoC), or with other therapies such as the signal transducer and activator of transcription-3/interleukin-6 (STAT3/IL-6) inhibitors and checkpoint inhibitors. While the newly presented data reaffirmed ONA-XR’s potential benefit as a triplicate treatment in progesterone receptor (PR) positive metastatic breast cancer (mBC) (along with current SoC endocrine treatments and CDK4/6 inhibitors), early data suggesting possible combination with other therapeutic classes present encouraging signals for ONA-XR’s prospects. Combination with checkpoint inhibitors, in particular, appears interesting, given their lack of success in hormone-driven tumors such as breast cancer, as a result of these tumors being immunologically unresponsive or ‘cold’. Preclinical data presented by Context suggest that anti-progestins such as ONA-XR can modify the tumor microenvironment to enhance the efficacy of immunotherapies. Positive development here could significantly expand ONA-XR’s market potential.
CLDN6xCD3 candidate nearing finalization
The R&D webinar also highlighted the higher specificity of Context’s claudin 6 candidates over the clinical benchmark. The company indicated that partner Integral Molecular has tested a panel of 54 CLDN6xCD3 combinations, of which 12 candidates were shortlisted for further testing. Management expects the final clinical candidate to be selected by H222, to support IND-enabling studies.
Valuation: Maintained at $134.1m or $8.40/share
Our valuation remains unchanged following the AACR presentations and R&D webinar. While it is too early to accurately ascribe a value based on the presented preclinical data, we highlight the upside potential on clinical progress.
Harnessing ONA-XR as potential combination therapy
Three of the five posters presented by Context at the AACR Annual Meeting focused on the potential application of onapristone extended-release (ONA-XR) as a combination treatment (for hormone-driven cancers), with a range of therapeutic classes including the current SoC as well as novel therapeutics targeting this space. One of the preclinical studies (and the one we believe to have most bearing on ONA-XR’s current clinical plans) was conducted Dr Elisabetta Marangoni at the Institut Curie, Paris. The study assessed the efficacy of ONA-XR in patient-derived xenograft (PDX) models of progesterone receptor positive (PR+) breast cancer which has metastasized to the bones. The preclinical study assessed two PDX models, one with low-level PR expression (BC1101) and one with high PR expression (BC1117). As expected, the study concluded that the tumor with a high level of PR expression responded better to onapristone. However, the more important observation was that while onapristone as monotherapy demonstrated only a weak therapeutic effect on the high PR-expressing tumor, a combination (triplicate) treatment alongside anti-estrogens/endocrine therapies (fulvestrant) and cyclin-dependent kinases 4 and 6 (CDK4/6, palbociclib) or phosphoinositide 3-kinase (PI3K, alpelisib) inhibitors amplified the efficacy of the current SoC, resulting in complete and sustained tumor regression for the study duration (Exhibit 1).
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Exhibit 1: Onapristone efficacy as a combination treatment in high PR-expressing PDX model |
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Source: Context Therapeutics R&D webinar presentation, April 2022 |
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Exhibit 1: Onapristone efficacy as a combination treatment in high PR-expressing PDX model |
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Source: Context Therapeutics R&D webinar presentation, April 2022 |
While these data support ONA-XR’s current development programs evaluating the drug as a combination treatment with SoC in PR-expressing mBC and gynecological cancers, the possibility of discovering other mechanisms of action with different therapeutic classes is encouraging about the future potential for ONA-XR. One of the other possible combinations was explored by Dr Tony B D’Assoro at the Mayo Clinic in a preclinical tumor xenograft study assessing the therapeutic efficacy of the Aurora A kinase inhibitor alisertib in combination with anti-progestins in endocrine-resistant hormone receptor positive (HR+) mBC. Activation of the Aurora A/STAT3/IL-6 signaling pathway is believed to induce resistance to endocrine treatment in breast cancer. The study concluded that the dual pharmacologic targeting of Aurora A and PR signaling pathways is additive/synergistic in HR+ breast cancer resistant to the SoC (Exhibit 2). Context has indicated the possibility of exploring this mechanism of action in a separate clinical trial, although this could come with additional regulatory complexity given that alisertib is currently unapproved for any indication. We note that alisertib is currently being evaluated as a monotherapy/combination therapy with fulvestrant in endocrine resistant breast cancer (Phase II). The study is sponsored by the Mayo Clinic and is being conducted in collaboration with the National Cancer Institute.
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Exhibit 2: Effect of dual targeting of Aurora A and PR signaling pathways in endocrine-resistant breast cancer |
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Source: Context Therapeutics R&D webinar presentation, April 2022 |
The final poster presentation on ONA-XR explored the results from a preclinical study conducted by Lauryn Werner at the University of Kansas Cancer Center. The preclinical study (in vivo study, mice model) evaluated the role played by progesterone (which signals through the PR) in making PR+ breast cancers immunologically ‘cold’, resulting in poor tumor response to immune-based therapies. Immune-resistant tumors tend to have low numbers of effector T-cells and a high number of suppressive immune cells such as regulatory T-cells. The hypothesis was that if progesterone mediates immune resistance in these tumors, suppression of the PR using anti-progestins (such as ONA-XR) should in turn enhance the response of these cancers to immunotherapies. The study data indicated that while treatment with anti-progestins inhibited the growth of PR+ tumors, it also materially reduced the number of regulatory T-cells (Exhibit 3), implying an improved microenvironment conducive to immunotherapy-based treatments such as checkpoint inhibitors. Although very early in its development journey, further progress in combining ONA-XR with immunotherapy treatments could significantly expand the drug’s market potential.
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Exhibit 3: Effect on anti-progestin treatment in PR+ tumors |
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Source: Context Therapeutics R&D webinar presentation, April 2022 |
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Exhibit 3: Effect on anti-progestin treatment in PR+ tumors |
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Source: Context Therapeutics R&D webinar presentation, April 2022 |
CLDN6xCD3 nearing final candidate selection
The remining two posters at the AACR focused on Context’s second asset, the bispecific antibody CLDN6xCD3 library. The company had highlighted the therapeutic benefits of targeting CLDN6 (expressed on a variety of malignant tumor cells but rarely in healthy tissue) earlier but noted that progress has been stymied by the lack of selectivity of the candidates under development. Context claims that the candidates under consideration have more than 10x selectivity over competing therapies and demonstrated preclinical data from two potential candidates (versus the existing benchmark) as early proof of CLDN6 specificity (Exhibit 4).
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Exhibit 4: CLDN6 selectivity of Context’s candidates versus benchmark |
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Source: Context Therapeutics R&D webinar presentation, April 2022 |
The company also disclosed that it has completed in vitro characterization of a panel of 54 CLDN6x CD3 bispecific antibody candidates, of which 12 have been shortlisted for further development and scale-up. The final clinical candidate is expected to be chosen by H222, followed by IND-enabling studies.
Valuation
Our investment case remains unchanged given the very early-stage nature of the data presented at AACR, but we see potential for uplift as further progress is made in clinical development. Please refer to our prior note for a review on our financial assumptions.
Exhibit 5: Context Therapeutics valuation (risk-adjusted NPV)
Program |
Indication |
Status |
Probability of success |
Launch year |
Peak sales ($m) |
Economics |
Risked NPV ($m) |
|||
ONA-XR |
Second-line HR+/HER2- mBC |
Phase II |
15% |
2026 |
498 |
US (fully owned) |
40.7 |
|||
First-line escalation therapy for HR+/HER2- mBC (ctDNA+) |
Phase Ib |
7.5% |
2027 |
222 |
US (fully owned) |
7.0 |
||||
Recurrent PR+ endometrial cancer |
Phase II |
10% |
2027 |
583 |
US (fully owned) |
28.5 |
||||
Advanced GCT of the ovary |
Phase II |
10% |
2027 |
292 |
US (fully owned) |
11.5 |
||||
Net cash (estimated, end Q122) |
46.4 |
|||||||||
Total firm value |
134.1 |
|||||||||
Total basic shares (m) |
16.0 |
|||||||||
Value per basic share ($) |
8.40 |
|||||||||
Total diluted shares (m) |
1.6 |
|||||||||
Value per diluted share ($) |
7.65 |
|||||||||
Source: Edison Investment Research
Exhibit 6: Financial summary
$000s |
2020 |
2021 |
2022e |
2023e |
2024e |
||
Year end 31 December |
US GAAP |
US GAAP |
US GAAP |
US GAAP |
US GAAP |
||
INCOME STATEMENT |
|||||||
Revenue |
|
|
0 |
0 |
0 |
0 |
0 |
Cost of Sales |
0 |
0 |
0 |
0 |
0 |
||
Gross Profit |
0 |
0 |
0 |
0 |
0 |
||
Research and Development Expenses |
(1,642) |
(6,893) |
(12,336) |
(16,904) |
(30,786) |
||
Sales, General and Administrative Expenses |
(931) |
(3,633) |
(4,723) |
(6,140) |
(7,982) |
||
EBITDA |
|
|
(2,572) |
(10,526) |
(17,059) |
(23,044) |
(38,768) |
Operating profit (before amort. and excepts.) |
|
(2,572) |
(10,526) |
(17,059) |
(23,044) |
(38,768) |
|
Amortization of acquired intangibles |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
0 |
0 |
0 |
0 |
0 |
||
Share-based payments |
0 |
0 |
0 |
0 |
0 |
||
Reported operating profit |
(2,572) |
(10,526) |
(17,059) |
(23,044) |
(38,768) |
||
Net Interest |
(661) |
(64) |
994 |
730 |
283 |
||
Joint ventures & associates (post tax) |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
9,878 |
133 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
(3,233) |
(10,590) |
(16,065) |
(22,314) |
(38,485) |
Profit Before Tax (reported) |
|
|
6,644 |
(10,457) |
(16,065) |
(22,314) |
(38,485) |
Reported tax |
0 |
0 |
0 |
0 |
0 |
||
Profit After Tax (norm) |
(3,233) |
(10,590) |
(16,065) |
(22,314) |
(38,485) |
||
Profit After Tax (reported) |
6,644 |
(10,457) |
(16,065) |
(22,314) |
(38,485) |
||
Minority interests |
0 |
0 |
0 |
0 |
0 |
||
Discontinued operations |
0 |
0 |
0 |
0 |
0 |
||
Net income (normalized) |
(3,233) |
(10,590) |
(16,065) |
(22,314) |
(38,485) |
||
Net income (reported) |
6,644 |
(10,457) |
(16,065) |
(22,314) |
(38,485) |
||
Average Number of Shares Outstanding (m) |
0.3 |
2.8 |
16.0 |
16.0 |
16.0 |
||
EPS - basic normalized ($) |
|
|
(9.28) |
(3.74) |
(1.01) |
(1.40) |
(2.41) |
EPS - normalized fully diluted ($) |
|
|
(9.28) |
(3.74) |
(1.01) |
(1.40) |
(2.41) |
EPS - basic reported ($) |
|
|
3.07 |
(3.69) |
(1.01) |
(1.40) |
(2.41) |
Dividend ($) |
0 |
0 |
0 |
0 |
0 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
118 |
0 |
0 |
0 |
0 |
Intangible Assets |
0 |
0 |
0 |
0 |
0 |
||
Tangible Assets |
0 |
0 |
0 |
0 |
0 |
||
Investments & other |
118 |
0 |
0 |
0 |
0 |
||
Current Assets |
|
|
350 |
51,306 |
37,123 |
14,806 |
17,549 |
Stocks |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
0 |
0 |
0 |
0 |
0 |
||
Cash & cash equivalents |
341 |
49,686 |
36,475 |
14,157 |
16,901 |
||
Other |
9 |
1,620 |
648 |
648 |
648 |
||
Current Liabilities |
|
|
(9,548) |
(3,033) |
(4,916) |
(4,913) |
(6,141) |
Creditors |
(2,708) |
(1,826) |
(2,960) |
(2,799) |
(3,296) |
||
Tax and social security |
0 |
0 |
0 |
0 |
0 |
||
Short term borrowings |
(5,884) |
0 |
0 |
0 |
0 |
||
Other |
(956) |
(1,207) |
(1,956) |
(2,114) |
(2,845) |
||
Long Term Liabilities |
|
|
(69) |
0 |
0 |
0 |
(40,000) |
Long term borrowings |
(69) |
0 |
0 |
0 |
(40,000) |
||
Other long-term liabilities |
0 |
0 |
0 |
0 |
0 |
||
Net Assets |
|
|
(9,150) |
48,272 |
32,207 |
9,893 |
(28,592) |
Convertible preferred stock |
(7,771) |
0 |
0 |
0 |
0 |
||
Minority interests |
0 |
0 |
0 |
0 |
0 |
||
Shareholders' equity |
|
|
(16,921) |
48,272 |
32,207 |
9,893 |
(28,592) |
CASH FLOW |
|||||||
Op Cash Flow before WC and tax |
(2,572) |
(10,526) |
(17,059) |
(23,044) |
(38,768) |
||
Working capital |
1,318 |
(2,225) |
2,855 |
(3) |
1,228 |
||
Exceptional & other |
219 |
3,951 |
994 |
730 |
283 |
||
Tax |
0 |
0 |
0 |
0 |
0 |
||
Operating Cash Flow |
|
|
(1,035) |
(8,799) |
(13,210) |
(22,318) |
(37,256) |
Capex |
0 |
(250) |
0 |
0 |
0 |
||
Equity financing |
0 |
58,394 |
0 |
0 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
0 |
0 |
0 |
||
Net Cash Flow |
(1,035) |
49,345 |
(13,210) |
(22,318) |
(37,256) |
||
Opening net debt/(cash) |
|
|
21,742 |
13,384 |
(49,686) |
(36,475) |
(14,157) |
FX |
0 |
0 |
0 |
0 |
0 |
||
Other non-cash movements |
9,393 |
13,725 |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
13,384 |
(49,686) |
(36,475) |
(14,157) |
23,099 |
Source: Context Therapeutics reports, Edison Investment Research
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Research: TMT
Ahead of its FY21 results scheduled for 11 May, Mirriad has announced some strategic hires, which emphasise the scale of its ambitions for the key US market. It is taking on a head of programmatic partnerships (ex-Verizon, Brightroll) to accelerate the integration of Mirriad’s platform into the adtech ecosystem and a head of studio partnerships (ex-Hallmark, Netflix) to further develop the content supply from producers and networks. Both are highly experienced in their fields and based in the United States. A new senior sales hire in the UK should help maintain momentum in the domestic market.
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