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Introduction

Newlink Genetics (NLNK) Hyperacute(R) pancreatic cancer vaccine (algenpantucel-L) is composed of irradiated whole cancer cells from two different pancreatic cancer tumors that have been genetically modified to add a sugar molecule known as alpha-Gal that is unique to animals. Alpha-Gal residues are powerful antigens that cause a rapid, hyperacute rejection response whenever foreign tissues bearing them are introduced into the human body. Thus the goal of the Hyperacute(R) platform is to train the patient's immune system to attack and destroy cells expressing antigens contained in the vaccine. Algenpantucel-L is an allogeneic vaccine, meaning that it is not patient-specific. Newlink's Hyperacute(R) vaccine platform has not yet been validated in a randomized clinical trial.

Phase I

The company initiated a Phase-I/-II study with single-agent algenpantucel-L in November 2005 with the objective of establishing the optimum dose and schedule. The study enrolled 7 patients and was completed in September 2007. We were unable to find a recommended Phase-II dose resulting from this study.

Phase II

In December 2007, Newlink initiated an open-label, Phase-II trial (N=69) that evaluated the use of algenpantucel-L in combination with chemotherapy and chemoradiotherapy in recently resected pancreatic cancer patients. The first cycle of treatment consisted of vaccination with algenpantucel-L on days one and eight. One week after the second vaccination, gemcitabine was administered at 1000mg/m2/week for three weeks, on days one, eight, and 15, in conjunction with algenpantucel-L dosed on days one and 15 of cycle two. Chemoradiotherapy was initiated one to two weeks after the completion of cycle two. Continuous infusion 5-FU was administered at 250 mg/m2/day for the entire duration of radiation therapy. Algenpantucel-L was administered on days one, 15, 29, and 43 of the chemoradiotherapy stage.

Phase II Dosing Scheme

Patients that completed the study received a total of 14 vaccinations. Interestingly, the vaccine dose was lowered from 300 million cells to 100 million cells in September 2009.

The primary endpoint of the study, 12-month disease free survival (DFS), was 62% and the overall median DFS was 14.1 months. Subgroup analysis showed that patients receiving 300 million cells/dose had a 12-month DFS of 81%, while those receiving 100 million cells/dose had a 12-month DFS of 51% (p=0.02). One-year and two-year survival were 86%, and 51%, respectively which compared favorably with historical results. Subgroup analysis showed that patients receiving 300 million cells/dose had an overall 12-month survival of 96%, while those receiving 100 million cells/dose had an overall 12-month survival of 79% (p=0.053).

Phase III

In April 2010, Newlink initiated a randomized Phase-III study in 722 resected stage I and II pancreatic cancer patients that will evaluate gemcitabine alone or 5-FU chemoradiation +/- algenpantucel-L. The study is projected to be completed in January 2014. Dosing in the study is following the Phase-II design with patients receiving up to 18 vaccinations with 300 million cells of algenpantucel-L. Half of the 722 patients had been enrolled by June 2012 and, at that time, an interim analysis was projected to occur in early 2013.

In October 2012, Newlink initiated of an open-label, randomized, multi-institutional Phase-III study in patients (N=280) with borderline resectable or locally advanced unresectable pancreatic cancer. Patients will be randomized (1:1) to receive FOLFIRINOX +/- algenpantucel-L (300 million cells). The primary and secondary endpoints of the study are overall survival and progression-free survival, respectively. While this study will not be adequate expand the algenpantucel-L label, it could potentially generate off-label sales assuming approval in the lead indication.

Discussion

The clinical development of algenpantucel-L has followed a disjointed path that erodes confidence in regards to the product's commercial viability.

A first-in-man (FIM) safety and dose-ranging study enrolled a total of 7 recently resected Stage-I/-II patients, a number insufficient to adequately assess the study objectives. Specifically, it is simply not possible to evaluate the safety and biologic response of a range of doses, dosing frequency and dosing duration in 7 patients. We believe that the viability of the study was compromised by its design which impeded enrollment; specifically, the chemo-radiotherapy naïve patient population was understandably reluctant to participate in a trial with an unproven agent. The study should have been conducted in combination with chemotherapy and/or radiation in a manner similar to that employed in the subsequent Phase-II study, or as a single-agent in later stage patients that have exhausted all treatment options.

The subsequent Phase-II study provided an opportunity to gather additional information on dose, although this appears to have been an afterthought as it was done through a protocol amendment in August 2009. The study also provided an opportunity to generate data with algenpantucel-L in combination with chemotherapy and radiation. In our opinion, the dose and schedule for algenpantucel-L have not been thoroughly investigated.

Despite the small size of the Phase-II study, Newlink has compared the data from this study with historical data. We have previously emphasized that such comparisons have little to no prognostic value with respect to predicting the outcome of randomized Phase-III studies, a fact supported by a significant volume of data.

Newlink initiated a randomized Phase-III study in the manner of its Phase-II study with 722 patients; the selected vaccine dose is 300 million cells. As we are unaware of the efficacy assumptions underlying the trial design, there is no way of knowing if the study is adequately powered.

Other Considerations

Newlink has prematurely terminated 5 of 11 of its clinical trials which has cost them time and money. They repeatedly initiated poorly designed FIM trials that had to be terminated because of slow enrollment. The first such study was initiated in 2004 with a breast cancer vaccine; it is unclear why this practice was continued.

Newlink's IDO program targets a topical pathway in cancer immunotherapy that could very well benefit Newlink's vaccine portfolio.

Newlink had $28.9 MM in cash, cash equivalents and short-term investments at the end of 3Q12 which, at their current burn rate (~$4.7 MM/quarter), should be sufficient to fund development activities into 2014. Newlink filed a registration statement for 832,648 shares on November 13, 2012 and subsequently announced that its Hyperacute Pancreas Immunotherapy received an official designation as an Orphan Medical Product from the European Commission on November 14, 2012.

Conclusions

Given the limited data supporting Newlink's Phase-III study and the historically low success rates for cancer vaccines and pancreatic cancer treatments, we assess the current probability of technical and regulatory success for algenpantucel-L at 15-20%. This is well below that of a typical Phase-III asset (~45%) and augurs disappointment for investors in 2013.

Source: Newlink Genetics' Pancreatic Cancer Vaccine Likely To Disappoint Investors In 2013