Immutep Limited (IMM-AU): Key takeaways from investor meetings in London

goetzpartners securities Limited

27-Sep-2018 / 10:59 GMT/BST


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Published to the market and investors on 27th September 2018 @ 10.16am (London time).

 

Immutep Limited (IMM-AU): Key takeaways from investor meetings in London
Recommendation: OUTPERFORM
Target Price: AUD0.078
Current Price: AUD0.047 (COB on 27th September 2018)

KEY TAKEAWAY

In this flash note we summarise key areas of focus at investor meetings we hosted in London and further take the opportunity to flag the clinical trial collaboration and supply agreement Immutep signed with Merck KGaA / Pfizer focused on evaluating anti-PD-L1 Bavencio (avelumab) with Immutep’s lead asset eftilagimod alpha (“efti”). 2019 will be a decisive year rich in pipeline events and we see room for significant upside from our conservative AUD0.078 target price. The company is burning c.AUD10m / year and is fully funded until YE2019E in the absence of income from a potential licensing deal. We maintain and reiterate our OUTPERFORM recommendation.

Broadest LAG-3 targeted pipeline including four distinct mechanisms of action

Since its discovery by IMM CMO / CSO Frédéric Triebel in the early 1990’s, LAG-3 has been gaining increasing attention from industry due to its potential to become the 3rd pillar in the immune checkpoint arsenal, with >10,000 patients now enrolled in clinical trials involving a LAG-3 targeted therapy. IMM’s pipeline includes two oncology-focused assets, (1) efti (Ph IIb solid cancers), a LAG-3 Ig fusion protein that binds to MHC class II on antigen-presenting cells (“APCs”) and (2) IMP701 (Ph II solid tumours), an anti-LAG-3 mAb that blocks the negative signalling on T cells thus releasing the breaks on the immune system (similar to anti-PD-1 / L1 and anti-CTLA-4 mAbs); and two assets for auto-immune disease, (3) IMP731 (Ph II ulceratice colitis), an anti-LAG-3 depleting mAb that kills auto-reactive T cells, and (4) IMP761 (preclinical), a LAG-3 stimulating mAb that down-modulates auto-reactive T cells.

Efti is the only LAG-3 targeted therapy that acts via APC stimulation

The vast majority of the LAG-3 targeted therapies in clinical development are LAG-3 blocking mAbs, such as BMS’s relatlimab and IMM’s own IMP701. Efti is the only molecule in this field that acts on the ligand, i.e. MHC class II on dendritic cells (“DC”) rather than the receptor, i.e. LAG-3 on T cells, leading to DC maturation and activation into professional APCs. This in turn leads to T cell activation via normal physiological processes and is therefore a process that can and has been shown to complement the immuno-modulatory functions of chemotherapy and blockade of other immune checkpoints. A key benefit of being used to stimulate APCs rather than to block LAG-3 on T cells means that only 2% – 3% receptor occupancy is necessary to achieve the desired effect, which has translated into a low dose of up to 30mg / patient and hence excellent safety (only transient erythema at the injection site has been observed in treated patients so far), as potentially a low cost of goods.

New clinical trial collaboration & supply agreement adds pharma partners

On 24 Sep IMM announced that it would work with Merck KGaA / Pfizer to test efti plus avelumab in advanced solid malignancies. This collaboration is similar to the one IMM already has with Merck & Co for efti, consisting in the pharma partner(s) supplying clinical trial material for a Phase I trial, which in this case will be an amendment of the ongoing investigator-led INSIGHT trial and focus on safety. Importantly, IMM retains all rights to efti and hence the ability to sign a potential licensing deal with any bidding company following Phase IIb data (AIPAC trial) for efti in HR +ve / HER2 -ve metastatic breast cancer (“mBC”) in 2019E. We remind investors that IMM already has bona fide licensing deals with Novartis (IMP701), GSK (IMP731) and EOC (efti, China only).

2019 is a decisive year rich in news flow across all pipeline assets

The most important catalyst for IMM shares is Phase IIb data from the AIPAC trial testing efti in combination with chemo (paclitaxel), which could form the basis of a conditional approval and an attractive licensing deal. The combination already led to encouraging overall response rates (“ORR”) of 47% in the 15-patient safety run-in and 50% in the 30-patient Phase I/II trial. Other pipeline events in 2019E include: (1) final data from the TACTI-mel Phase I trial in melanoma (combo with anti-PD-1 Keytruda), (2) first data from the TACTI-002 Phase II trial in lung and head & neck cancer (combo with Keytruda), and (3) first data from the Phase I INSIGHT trial. We maintain and reiterate both our OUTPERFORM recommendation and AUD0.078 target price.

Kind regards,

Brigitte de Lima | Analyst

goetzpartners Healthcare Research Team | Research Team

goetzpartners securities Limited

The Stanley Building, 7 Pancras Square, London, N1C 4AG, England, UK.

T +44 (0) 203 859 7725 | brigitte.delima@goetzpartners.com / healthcareresearch@goetzpartners.com

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