Mendus — Sights on vididencel (in AML) combination study

Mendus (OMX: IMMU)

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Research: Healthcare

Mendus — Sights on vididencel (in AML) combination study

On the heels of Mendus’s recent Q123 results, we take a deep dive into the company’s lead cancer vaccine candidate, vididencel, and the acute myeloid leukaemia (AML) maintenance treatment landscape. On closer inspection of the current AML pipeline and standard of care (SoC), vididencel’s clinical profile and the potential advantages associated with the vaccine’s ‘off-the-shelf’ characteristics may enable more timely and wider access of treatment to patients compared to individualised therapy approaches. Additionally, we view the company’s move to prioritise a combination study of vididencel with AML maintenance SoC Onureg (oral azacitidine) as a sensible strategic decision. Our valuation of Mendus remains unchanged at SEK1.8bn or SEK9.19 per share.

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

Healthcare

Mendus

Sights on vididencel (in AML) combination study

Clinical outlook

Pharma and biotech

23 May 2023

Price

SEK1.29

Market cap

SEK260m

SEK10.4/US$

Net debt (SEKm) at 31 March 2023 (excluding lease liabilities)

46.0

Shares in issue

201.3m

Free float

37%

Code

IMMU

Primary exchange

Nasdaq Stockholm

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(27.9)

(29.7)

(45.1)

Rel (local)

(28.6)

(30.2)

(47.9)

52-week high/low

SEK3.40

SEK1.08

Business description

Mendus is a clinical-stage immunoncology company based in Sweden and the Netherlands. The company specialises in allogeneic dendritic cell biology and currently has two lead cell-based, off-the-shelf therapies for haematological and solid tumours.

Next events

Vididencel Phase II combination study initiation

H223

Vididencel mRFS data in ADVANCE II

Q423

Analysts

Soo Romanoff

+44 (0)20 3077 5700

Dr Adam McCarter

+44 (0)20 3077 5700

Mendus is a research client of Edison Investment Research Limited

On the heels of Mendus’s recent Q123 results, we take a deep dive into the company’s lead cancer vaccine candidate, vididencel, and the acute myeloid leukaemia (AML) maintenance treatment landscape. On closer inspection of the current AML pipeline and standard of care (SoC), vididencel’s clinical profile and the potential advantages associated with the vaccine’s ‘off-the-shelf’ characteristics may enable more timely and wider access of treatment to patients compared to individualised therapy approaches. Additionally, we view the company’s move to prioritise a combination study of vididencel with AML maintenance SoC Onureg (oral azacitidine) as a sensible strategic decision. Our valuation of Mendus remains unchanged at SEK1.8bn or SEK9.19 per share.

Year
end

Revenue (SEKm)

PBT*
(SEKm)

EPS*
(SEK)

DPS
(SEK)

P/E
(x)

Yield
(%)

12/21

0.0

(133.4)

(0.73)

0.0

N/A

N/A

12/22

3.4

(138.8)

(0.70)

0.0

N/A

N/A

12/23e

0.0

(133.6)

(0.67)

0.0

N/A

N/A

12/24e

0.0

(145.3)

(0.72)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

The clinical road laid out in AML

Following the positive results of the ADVANCE II study, management intends to focus on maximising vididencel’s potential value as an AML maintenance treatment. The company’s planned Phase II combination study with Onureg will include the same patient population as the ADVANCE II trial, patients who have gone into complete disease remission following first-line induction chemotherapy, and, in our view, represents a logical next step in vididencel’s clinical development. Additionally, we see combination treatment regimens as being critical for future clinical breakthroughs to disrupt SoC treatment protocols in oncology.

‘Off-the-shelf’ therapies the next generation

While we acknowledge the notable clinical advances that have been made in recent years with personalised (autologous) cell-based therapies, notably CAR-T in the treatment of haematological malignancies, these patient-specific treatments continue to suffer from significant logistical drawbacks. Notably, extended manufacturing lead times continue to be a major bottleneck for personalised treatments, which is a potentially serious issue for patients with highly aggressive cancers. As an ‘off-the-shelf’, non-patient-specific product, vididencel may be able to overcome such production constraints and offer a more advantageous COGS profile to facilitate broader access to patients.

Valuation: SEK1.8bn or SEK9.19 per share

Our valuation of Mendus remains unchanged at SEK1.8bn or SEK9.19/share, including net debt of SEK46.0m at end-Q123. We will revisit our valuation assumptions for vididencel once the full survival results of the ADVANCE-II study are reported.

AML maintenance remains an untapped opportunity

AML is an aggressive type of blood and bone marrow cancer that affects a patient’s white blood cells. While the disease is among the most common leukaemia types in adults, AML is still a relatively rare cancer, with an estimated 20,380 new cases expected to be diagnosed in the United States in 2023. While chemotherapy may not be suitable for certain patient populations, particularly older individuals, the regimen continues to be widely used with c 75% of AML patients potentially eligible to receive this treatment. However, despite advances in AML therapies, c 50% of AML patients who have achieved complete remission will experience disease relapse. An emerging space in AML treatment paradigms is that of maintenance therapy, which involves the complete eradication of residual cancerous cells from the body, following a patient’s complete response to induction therapy, to prolong remission duration, prevent relapse and improve overall survival (OS). An important concept in AML maintenance therapy is measurable residual disease (MRD), which refers to the presence of cancerous cells at levels conventional testing methods cannot detect but that more sensitive modern methods can. Therefore, a patient may be classified as in complete remission while still being MRD positive. Importantly, as a prognostic biomarker, MRD status is recognised as an important relapse risk factor in AML, and MRD negativity is associated with superior long-term survival.

Maintenance therapies are designed to combat MRD after remission, as the safety and toxicity of continuing certain chemotherapy regimens is unsatisfactory (venetoclax + azacitidine, 3+7 regimens). However, there are only two approved maintenance treatments indicated in AML patients following complete remission after 3+7 chemotherapy (three days of an anthracycline antibiotic and seven days of cytarabine chemotherapy):

Oral azacitidine (Onureg, CC-486, Bristol Myers Squibb) monotherapy is currently the only approved AML maintenance drug and current SoC for patients ineligible for allo-HSCT. We note that azacitidine is considered a chemotherapy but possesses a safer profile, making it more suitable for longer-term use.

Allogeneic hematopoietic stem cell transplantation (allo-HSCT) continues to be one of the most effective post-remission therapies for AML patients who have first undergone induction chemotherapy. However, certain patient groups (particularly older patients) may not be eligible for treatment due to potential toxicity issues and many patients are likely to relapse. To date, no maintenance therapy is indicated post-HSCT.

As the number of AML patients in complete remission is likely to increase as new, effective therapies are approved and patients survive longer, the requirement for safe and effective AML maintenance therapies that do not affect patient quality of life will represent a considerable area of medical need, in our opinion.

Scope to differentiate vididencel in a quieter pipeline

Onureg is the only approved AML maintenance drug that has been indicated in patients who are in complete remission following induction chemotherapy. Onureg was approved by the FDA as an AML maintenance therapy in 2020, based on data from the randomised, placebo-controlled, double-blind Phase III QUAZAR AML-001 (NCT01757535) study, where the drug demonstrated a median overall survival (mOS) of 14.6 months (vs 10.4 months in placebo group) and median relapse-free survival (mRFS) of 7.1 months (vs 2.7 months in placebo group) in baseline MRD+ patients. With currently limited treatment options, there remains significant scope for new AML maintenance treatments that can demonstrate more durable clinical responses to offer market differentiation, in our view.

The AML maintenance pipeline may appear quite competitive on first inspection; however, on closer analysis, the setting that Mendus is strategically prioritising with vididencel (patients in first complete remission, CR1, after induction chemotherapy) appears to have relatively limited emerging technologies, Exhibit 1.

Exhibit 1: Active AML post-remission maintenance therapy studies

Drug

Company

Phase

Maintenance setting

Technology

Description

Notes

Galinpepimut-S (Zeltherva)

Sellas Life Sciences

Phase III

Following second complete remission (CR2) after chemotherapy

Cancer vaccine

A Wilms tumour-1 (WT1) peptide cancer vaccine. WT1 is a protein highly overexpressed in AML, making it a potential target for tumour selective cancer vaccines

Results from a Phase II study in CR1 AML patients reported mOS of >67.6 months while a Phase I/II trial in CR2 AML patients reported a mOS of 21.0 months. The ongoing Phase III trial is focused on the CR2 setting.

Oral azacitidine (Onureg) + Venetoclax

AbbVie/Roche

Phase III

Following CR1 after chemotherapy

Small molecule/s

Onureg is a hypomethylating agent with anticipated improved drug properties over injectable azacitidine. Venetoclax is a selective BCL2 inhibitor

Phase III VIALE-M study combines venetoclax with existing SoC maintenance AML treatment (Onureg). Randomised, double-blind, placebo- controlled trial with primary endpoint of relapse-free survival.

Venetoclax + azacitidine injectable

AbbVie

Phase III

Post-HSCT

Small molecule/s

See above in table

Phase III randomised and open-label VIALE-T study investigating venetoclax + azacitidine injectable, current SoC first-line therapy in chemo-unfit AML patients, as maintenance post HSCT.

Gilteritinib (Xospata)

Astellas

Phase III

Post-HSCT

Small molecule

Targeted FMS-like tyrosine kinase (FLT3) inhibitor that competitively binds with ATP

Phase III randomised, double-blind, placebo-controlled study investigating Gilteritinib, current SoC in relapsed/refractory FLT3+ AML patients, as maintenance post HSCT in FLT3-ITD+ patients.

Gilteritinib (Xospata)

Astellas

Phase II

Following CR1 after chemotherapy

Small molecule

See above in table

Phase II randomised, double-blind, placebo-controlled study assessing Gilteritinib maintenance in FLT3-ITD+ patients following CR1 after chemotherapy.

Siremadlin (HDM201)

Novartis

Phase I/II

Post-HSCT

Small molecule

MDM2 specific inhibitor, restoring p53 activity and promoting tumour cell apoptosis

Previous Phase I study demonstrated safety and preliminary response data with overall response rate (ORR) of 22% observed in one dosing protocol consisting of various AML patient populations.

Sabatolimab with/without azacitidine

Novartis

Phase I/II

Post-HSCT

Monoclonal antibody

TIM-3 inhibitor, novel target expressed on leukaemic and immune cells, enhancing anti-tumour immune response

Previous Phase I study in first-line AML patients demonstrated safety and response to treatment with ORR of 40%.

TSC-100 + TSC101

TScan Therapeutics

Phase I

Post-HSCT

Autologous Tcell

Personalised cell therapy targeting minor histocompatibility antigens (MiHA) HA-1 and HA-2

First patient dosed in Phase I study in March 2023 with dose escalation following initially observed safety.

Mana 312

Mana Therapeutics

Phase I

Post-HSCT

Allogenic Tcell

Allogenic (donor derived) T-cell therapy targeting multiple tumour associated antigens (TAA)

Being investigated in a Phase I open-label, non-randomised, single- and multiple-dose escalation study. Little detail on trial status or expected readouts.

MT-401

Marker Therapeutics

Phase II

Post-HSCT

Allogenic Tcell (donor matched)

Allogenic multiple TAA T-cell therapy requiring a matched unrelated donor with at least six or eight human leukocyte antigen (HLA) markers

Phase II open-label, single-arm study looking to recruit up to 180 patients. Preliminary safety profile has been demonstrated in the Phase II study

MT-401-OTS

Marker Therapeutics

Phase I

Post-HSCT

Allogenic Tcell

Allogenic multiple TAA T-cell therapy that does not require a matched donor. Could be considered a true ‘off the shelf’ therapy

No previous clinical data, with first patient dosing expected in 2023. Phase I open-label, single-arm study expected to recruit up to 44 patients.

Source: Clinicaltrials.gov, EvaluatePharma, Edison Investment Research

To our knowledge, the only late-stage therapeutic vaccine technology currently under development in AML maintenance is Sellas Life Sciences’ Wilms tumour-1 targeting peptide cancer vaccine, Galinpepimut-S. However, the treatment currently does not appear to directly compete with vididencel as it is being investigated as a maintenance therapy in patients who have undergone complete remission following second-line salvage therapy (CR2), not following first-line chemotherapy. While Sellas has selected the CR2 setting to secure an initial FDA label for Galinpepimut-S, the company has communicated its Phase I and II clinical data in CR1 patients could potentially support future label expansion into the CR1 maintenance line.

We note that the Phase III VIALE-M study (AbbVie/Roche) investigating the combination of Onureg (alternatively called CC-486) plus venetoclax is the most direct competition to vididencel. Venetoclax in combination with injectable azacitidine has previously received FDA approval as a first-line therapy in chemo-unfit patients (over the age of 75) and the VIALE-M trial is looking to expand venetoclax into the AML maintenance setting. Should the results from the combination VIALE-M study show clinically meaningful improvements in mRFS compared to Onureg alone, it could potentially disrupt the existing SoC in AML maintenance and may have an impact on Mendus’s future clinical strategy for vididencel. Astellas is also conducting a Phase II AML maintenance study in CR1 patients with Gilteritinib (FDA approved in relapsed/refractory line FLT3+ AML patients). However, the scope of this trial is focused on patients who possess an FLT3 mutation (FLT3+), representing c 30% of the AML population.

... backed up by a supportive clinical profile, to date

The most recent clinical data reported for vididencel are from the Phase II ADVANCE II trial where at a median follow-up period of 19.4 months, mRFS for the study patient population (n=20) was not yet reached (but 12-month RFS was estimated at 64%) and mOS stood at 30.9 months, Exhibits 1 and 2.

Exhibit 2: ADVANCE-II RFS data

Source: Mendus corporate presentation

Exhibit 3: ADVANCE-II OS data

Source: Mendus corporate presentation

Patients who were still in complete remission (12 out of 20 patients) had been so for 16 to 47 months after start of treatment and those who had converted to MRD-negative displayed a significantly prolonged RFS and OS, with neither mRFS nor mOS being reached in this sub-group. Additionally, vididencel continued to display a good safety profile, with no serious or severe adverse events reported (the main adverse events continued to be injection site reactions occurring within 48 hours of treatment). While we caution against direct comparison between the results of differently designed clinical studies (the QUAZAR AML-001 trial is randomised, placebo controlled and double blind), the fact that ADVANCE II had not reached RFS at a median follow-up period of 19.4 months suggests significantly improved relapse rates with vididencel treatment (mRFS in QUAZAR AML-001: 7.1 months). This is further supported by the mOS data from the ADVANCE trial (30.9 months), which, in our view, compares very favourably with the QUAZAR AML-001 data for Onureg (14.6 months). We acknowledge that the results of the ADVANCE II study are based on a smaller patient population (n=20) and that larger studies will need to be conducted to strengthen the evidence of vididencel’s clinical utility.

... and the potential advantages of an ‘off-the-shelf’ treatment

One of the major limitations of individualised cell therapy approaches continues to be constraints around manufacturing and patient access. Large-cap pharma companies, such as Bristol Myers Squibb and Johnson & Johnson, have reported ongoing issues around supply chain bottlenecks associated with their personalised multiple myeloma (MM) CAR-T treatments, Abecma and Carvykti. As a result, MM patient waiting times can be over six months and, once patients are referred, the turnaround time from patient biopsy to CAR-T infusion (‘vein-to-vein’ time) can be three to six weeks on average. Our view remains that the operational infrastructure to support the effective commercialisation and mass production of personalised treatments is not yet in place and may not be for quite some time. As such, we believe more universal cell therapy approaches looking to provide more timely, upfront access to treatment for patients offer significant potential to differentiate in the market.

With vididencel, Mendus is developing an ‘off-the-shelf’, multiple tumour-associated antigens (TAA) expressing, dendritic cell vaccine produced from the company’s proprietary AML cell line, DCOne. This cell-line based approach aims to circumvent the existing challenges encountered by patient-derived treatments by allowing for scalable, centralised manufacturing that may facilitate more timely and wider patient access. As vididencel is a non-individualised therapy, it could potentially benefit from shorter production and ‘vein-to-vein’ times compared to those currently observed for personalised cell therapies. Mendus has now engaged with Minaris, a global contract manufacturing organisation specialising in cell-therapy scale up, to support the clinical and commercial-scale production of vididencel. With these potential logistical advantages, and provided vididencel can continue to demonstrate a durable clinical and safety profile, we believe there is significant potential for Mendus’s lead asset to differentiate itself in the AML maintenance treatment market.

Further positive results may heighten interest

The re-emergence of cancer vaccine technology has seen the signing of notable licensing deals in recent years, Exhibit 4. In our view, a comparable deal of note is the worldwide licensing agreement signed in 2020 between Roche and Nykode worth up to $715m in upfront and milestone payments for the Scandinavian biotech’s personalised cancer vaccine, VB10.NEO. At the time of the agreement, VB10.NEO was in the Phase I portion of a Phase I/II basket trial that included patients with advanced or metastatic melanoma, non-small cell lung carcinoma, clear renal cell carcinoma urothelial cancer or squamous cell carcinoma of the head and neck. The study is ongoing, and Roche will assume full development responsibilities after the conclusion of the Phase I arm of the trial. However, we acknowledge the upfront payment of $200m received by Nykode is at the upper end of the industry average.

In our view, should vididencel continue to demonstrate positive results in the clinic it may significantly enhance the asset’s value and potential deal value that could be commanded from future licensing opportunities. Additionally, vididencel is being investigated in ovarian cancer and the broader application may add further value to the asset in the eyes of potential licensing partners.

Exhibit 4: Comparison oncology vaccine and immunotherapy licensing deals

Phase

Date

Licensee/partner

Licensor

Product

Upfront milestone payments ($m)

Total potential deal value ($m)

Phase I

20/10/2022

Roche

Hookipa

HB-700

40

970

Phase III**

07/12/2020

3D Medicines

Sellas Life Sciences

Zeltherva

8

202

Phase I

01/10/2020

Roche

Nykode

VB10.NEO

200

715

Phase II

18/11/2019

Fosun

Mimivax

SurVaxM

10

148

Preclinical

02/08/2016

Amgen

Advaxis

ADXS-NEO

40

540

Phase II*

10/08/2015

AstraZeneca

Inovio Pharmaceuticals

INO-3112

28

728

Phase III*

03/04/2015

Bristol Myers Squibb

Bavarian Nordic

Prostvac

60

975

Median

40

715

Source: EvaluatePharma, Edison Investment Research. Note: *Deal subsequently terminated. **Deal includes Greater China only.

Financials and valuation

As we had previously anticipated, in May 2023 Mendus drew down the remaining SEK15.0m shareholder loan (6% interest) from Van Herk Investments, meaning the company has now utilised the full SEK50m financing facility. As part of the new loan agreement, the end dates of the previous loans, the initial SEK10.0m two-year loan and subsequent SEK25.0m one-year loan, have been amended and the entirety of the SEK50m loan is now due by end-FY23. While refinancing of the loan could be a potential option, in the absence of additional funding opportunities, Mendus may need to further access the SEK195.0m convertible debt facility from Negma Group to pay off the outstanding current debt. This may provide an immediate source of financing for the company; however, we note that the convertible debt facility has the potential to be highly dilutive for shareholders. Mendus had previously accessed the Negma facility for an amount of SEK13.7m; however, subsequent conversions between 27 January 2023 and 4 April 2023 saw the company’s stock price fall by c 60% over this period.

Our forecasts and valuation, described in our prior note, are unchanged.

Exhibit 5: Financial summary

Accounts: IFRS; Year end 31 December; SEK000s

2020

2021

2022

2023e

2024e

Income statement

 

 

 

 

 

Total revenue

0

31

3,375

0

0

Cost of sales

0

0

0

0

0

Gross profit

0

31

3,375

0

0

SG&A (expenses)

(37,193)

(42,498)

(44,737)

(45,184)

(46,540)

R&D costs

(47,883)

(85,796)

(87,049)

(82,270)

(84,373)

Other income/(expense)

(65)

(845)

(1,134)

0

0

Exceptionals and adjustments

0

0

0

0

0

Reported EBITDA

(85,141)

(129,108)

(129,545)

(127,455)

(130,913)

Depreciation and amortisation

(887)

(992)

(4,139)

(4,131)

(4,939)

Reported Operating Profit/(loss)

(86,028)

(130,100)

(133,684)

(131,586)

(135,851)

Finance income/(expense)

(3,220)

(3,310)

(5,101)

(2,026)

(9,440)

Other income/(expense)

0

0

0

0

0

Exceptionals and adjustments

0

0

0

0

0

Reported PBT

(89,248)

(133,410)

(138,785)

(133,611)

(145,292)

Adjusted PBT

(89,248)

(133,410)

(138,785)

(133,611)

(145,292)

Income tax expense

0

0

0

0

0

Reported net income

(89,248)

(133,410)

(138,785)

(133,611)

(145,292)

 

 

 

 

 

 

Basic average number of shares, m

76.2

184.0

198.3

200.4

201.3

Basic EPS (SEK)

(1.17)

(0.73)

(0.70)

(0.67)

(0.72)

Diluted EPS (SEK)

(1.17)

(0.73)

(0.70)

(0.67)

(0.72)

 

 

 

 

 

 

Balance sheet

 

 

 

 

 

Property, plant and equipment

1,705

2,109

13,899

14,588

15,191

Intangible assets

532,441

532,441

532,441

532,441

532,441

Right of use assets

1,204

361

26,216

26,216

26,216

Other non-current assets

677

843

618

618

618

Total non-current assets

536,027

535,754

573,174

573,863

574,466

Cash and equivalents

167,643

155,313

41,851

48,128

97,233

Prepaid expenses and accrued income

4,760

10,214

1,919

1,919

1,919

Other current assets

20,230

19,702

3,442

3,442

3,442

Total current assets

192,633

185,229

47,212

53,489

102,594

Non-current loans and borrowings*

18,982

36,666

22,844

187,844

382,844

Non-current lease liabilities

303

0

23,706

23,706

23,706

Total non-current liabilities

19,285

36,666

46,550

211,550

406,550

Trade and other payables

10,365

11,610

7,411

7,411

7,411

Current loans and borrowings

14,879

0

29,198

0

0

Short-term lease liabilities

880

309

2,413

2,413

2,413

Other current liabilities

22,157

15,657

20,375

20,375

20,375

Total current liabilities

48,281

27,576

59,397

30,199

30,199

Equity attributable to company

661,094

656,743

514,440

385,604

240,312

 

 

 

 

 

 

Cashflow statement

 

 

 

 

 

Operating Profit/(loss)

(86,028)

(130,100)

(133,684)

(131,586)

(135,851)

Depreciation and amortisation

1,774

1,851

4,139

3,311

3,477

Other adjustments

0

0

0

0

0

Movements in working capital

27,731

(10,089)

27,030

0

0

Interest paid / received

(103)

(140)

(1,135)

(2,026)

(9,440)

Income taxes paid

0

0

0

0

0

Cash from operations (CFO)

(56,626)

(138,031)

(109,331)

(130,300)

(141,815)

Capex

(464)

(1,361)

(12,324)

(4,000)

(4,080)

Acquisitions & disposals net

0

0

0

0

0

Other investing activities

0

0

0

0

0

Cash used in investing activities (CFIA)

157,298

(1,361)

(12,324)

(4,000)

(4,080)

Net proceeds from issue of shares

51,629

128,949

0

4,775

0

Movements in debt

(725)

(1,922)

10,925

165,000

195,000

Other financing activities

0

0

(2,731)

(29,198)

0

Cash flow from financing activities

50,904

127,027

8,194

140,577

195,000

Increase/(decrease) in cash and equivalents

153,611

(12,330)

(113,462)

6,277

49,105

Cash and equivalents at beginning of period

14,032

167,643

155,313

41,851

48,128

Cash and equivalents at end of period

167,643

155,313

41,851

48,128

97,233

Net (debt) cash

133,782

118,647

(10,191)

(139,716)

(285,611)

Source: Mendus company accounts, Edison Investment Research. Note: *Includes the Van Herk Investments shareholder loan and the Negma Group convertible debt facility, which we assume will both be fully drawn down.

General disclaimer and copyright

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Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

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United Kingdom

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Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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Immix Biopharma — A quarter focusing on a CAR-T strategy

Following recent updates regarding Immix’s CAR-T therapy (NXC-201) and Q123 results, we have adjusted our financial estimates. Quarterly R&D expenses of $1.3m were lower than expected, largely due to lower clinical development costs. Roughly 48% of these expenses were related to quarterly payments made to the licensors of Nexcella’s (Immix’s majority-owned, 94%, subsidiary) CAR-T therapy, NXC-201. Based on the quarterly R&D spend run rate, we have revised our FY23 R&D expenses to $6.1m, down from $11.7m previously. The resulting operating loss of $10.9m is down from $15.8m previously. Immix ended the quarter with a net-cash position of $11.5m and raised a further $2.5m post quarter end through the company’s ATM facility, which we anticipate will provide an operating cash runway into Q224, a slight extension from Q423 previously. Our valuation of Immix has been adjusted due to the higher pro-forma cash position of $14m, rolling our model forward and our revised R&D estimates. We value Immix at $83.3m or $5.5 per share (previously $77.1m or $5.5/share).

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