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Many pharmaceutical companies announce the results of clinical trials testing the drugs they are developing at the annual meeting of the American Society of Clinical Oncology (OTC:ASCO). This year, immunotherapy, which uses a patient's own immune system to destroy cancer cells, was the focus of several drugs that have the potential to make significant breakthroughs in the treatment of cancer.

Bristol-Myers Squibb (BMY) and Merck (MRK) received the most media attention due to their anti-PD-1 drugs, which in early-stage clinical trials displayed impressive survival rates as melanoma therapies. Bristol-Myers's nivolumab and Merck's lambrolizumab block the PD-1 protein to prevent cancer cells from evading the body's immune system. Genentech/Roche (OTCQX:RHHBY) also presented preliminary data that indicated its PD-L1 antibody, MPDL3280A, showing meaningful tumor shrinkage in more than 20% of patients with advanced lung cancer, melanoma, kidney, and other cancers.

Another much smaller company that has pioneered immunotherapy as a cancer treatment also announced extremely promising clinical trial results at the ASCO meeting. Ames, Iowa-based NewLink Genetics (NLNK) is a 493M market cap company that has a portfolio of promising biologic and small molecule oncology immunotherapy product candidates intended to treat a wide range of oncology indications. NewLink's product candidates are designed to utilize multiple components of a patient's immune system to combat cancer without significant incremental toxicity, either as a monotherapy or in combination with other treatment regimens.

HyperAcute immunotherapy Platform

NewLink's HyperAcute immunotherapy platform creates novel biologic products that are designed to stimulate the human immune system to recognize and attack cancer cells. HyperAcute product candidates are composed of human cancer cells that are tumor specific, but not patient specific. These cells have been modified to express alpha-gal, a carbohydrate for which humans have pre-existing immunity. These alpha-gal-modified cells stimulate a rapid and powerful human immune response that trains the body's natural defenses to seek out and destroy cancer cells.

The objective of HyperAcute immunotherapies is to elicit an antitumor response by "educating" the immune system to attack a patient's own cancer cells. HyperAcute immunotherapies do not require any tissue from individual patients and use intact whole cells rather than cell fragments or purified proteins. NewLink researchers believe the unique properties of HyperAcute products result in the stimulation of a robust immune response.

Algenpantucel-L (HyperAcute pancreas)

NewLink's lead product candidate, algenpantucel-L (HyperAcute pancreas), a cancer vaccine comprised of irradiated allogeneic pancreatic cancer cells transfected to express murine alpha-1,3-galactosyltransferase with potential antitumor activity. Vaccination is associated with the expression of murine alpha-1,3-galactosyl (alpha-gal) carbohydrate residues on cell membrane glycoproteins and glycolipids of the vaccine pancreatic cancer cell allograft; murine alpha-gal epitopes, not present on human cells, then induce a hyperacute rejection of the vaccine pancreatic cancer cell allograft. The hyperacute rejection involves the binding of pre-existing human anti-alpha-gal antibodies (which naturally occur against gut flora) to murine alpha-gal epitopes, resulting in the rapid activation of antibody-dependent cell-mediated cytotoxicity (OTCPK:ADCC) towards allograft cells. The host immune system then attacks endogenous pancreatic cancer cells, resulting in ADCC towards endogenous pancreatic cancer cells.

Algenpantucel-L is being studied in a Phase 3 trial known as "IMPRESS," or the "Immunotherapy for Pancreatic Resectable cancer Survival Study" under a Special Protocol Assessment (SPA) with the U.S. Food and Drug Administration (FDA). This trial involves up to 722 patients with surgically resected pancreatic cancer. The purpose of this study is to assess overall survival after treatment with a regimen of adjuvant therapy (Gemcitabine alone or with 5-FU chemoradiation) with or without algenpantucel-L immunotherapy in subjects who have undergone surgical resection.

Algenpantucel-L is also being tested in a second Phase 3 study called "PILLAR" for "Pancreatic Immunotherapy with algenpantucel-L for Locally Advanced non-Resectable," involving patients with locally advanced pancreatic cancer. The primary objective of this study is to assess overall survival (OS) in pancreatic cancer patients with borderline resectable or locally advanced unresectable pancreatic cancer who will receive a regiment of FOLFIRINOX (5-fluorouracil [5-FU], oxaliplatin, irinotecan, and leucovorin) with or without HyperAcute-Pancreas Immunotherapy.

The American Cancer Society estimates that approximately 45,220 people (22,740 men and 22,480 women) will be diagnosed with pancreatic cancer in 2013, and about 38,460 people (19,480 men and 18,980 women) will die of pancreatic cancer this year.

For all stages of pancreatic cancer combined, the one-year relative survival rate is 20%, and the five-year rate is 4%.

According to Transparency Market Research, the global pancreatic cancer drug market is projected to reach $1.2 billion by 2015.

According to Research and Markets, there are 249 companies plus partners developing 290 drugs targeting pancreatic cancer in development.

Most patients diagnosed with pancreatic cancer continue to die from the rapid progression of the disease because it is typically without symptoms until significant spread has occurred.

Scientists have found that pancreatic tumor cells produce a number of defective proteins, or express normal proteins in highly uncharacteristic ways, as part of this cancer. In some cancers, these abnormalities can cause an immune response to the cancer cells much in the way one responds to infected tissue. In progressive cancers, the immune system fails to effectively identify or respond to these abnormalities and the cancer cells are not attacked or destroyed for reasons not yet fully understood.

The HyperAcute-Pancreas immunotherapy contains human pancreatic cancer cells that contain a mouse gene that marks the cancer cells as foreign to patient's immune systems. As a result, the immune system attacks these cancer cells just as they would attack any truly foreign tissue, destroying as much as it can. Aside from the mouse gene, the immune system is also stimulated to identify differences between these cancer cells and normal human tissue as foreign. According to NewLink, this "education" of the immune system helps treat the patient because pancreatic cancer cells already present in a treated patient are believed to show some of the same differences from normal tissue as the modified pancreatic cancer cells in the product. Due to these similarities, the immune system, once "educated" by the HyperAcute-Pancreas immunotherapy, identifies the patient's cancer as foreign and attacks.

On June 3, 2013, NewLink announced results from a Phase 2 clinical trial evaluating algenpantucel-L plus standard-of-care adjuvant therapy (gemcitabine and 5-FU-modulated radiation therapy) in 69 patients with resected pancreatic cancer.

The data from the study showed that one year disease-free survival was 62%, while overall survival was 86%. Data presented on elevated levels of three separate biomarkers (antibodies to mesothelin, CEA and/or alpha-gal) correlated with a statistically significant improvement in overall survival. The data showed median overall survival was 42 months in patients with elevated levels of anti-mesothelin antibodies versus 20 months in patients without elevated levels. The subset of patients that showed increases in two or more of these biomarkers had median overall survival greater than 42 months (median overall survival not reached for this subset of patients).

All patients were beyond three years of follow-up with study data showing three-year long-term disease-free survival and overall survival was 26% and 39%, respectively. The safety and tolerability of algenpantucel-L was favorable with no serious drug-related (grade 4) adverse events reported; the most frequent drug-related adverse events reported in the study were skin reactions at the injection sites.

The study defined disease-free survival at one year as its primary endpoint, and overall survival, safety and immunological correlative analysis as the secondary endpoints.

"The results of this study are very encouraging. The side effects of algenpantucel-L are minimal and quite tolerable. If the encouraging survival rates are confirmed in the randomized Phase 3 trial, it may very well change the standard of care and bring immunotherapy into the mainstream of pancreas cancer treatments," commented George A. Fisher, M.D., PhD., Professor of Medicine (Oncology) at Stanford University School of Medicine and leader of the Gastrointestinal Oncology Program at Stanford.

HyperAcute Melanoma Cancer Immunotherapy

NewLink Genetics' HyperAcute Melanoma product candidate consists of a group of three allogeneic melanoma tumor cell lines that were modified to express the gene that makes alpha-GT. These three cell lines each possess collections of known melanoma antigens so that the immune response they stimulate will provide broad coverage. Each of the modified cell lines is grown separately in large cultures, then harvested, irradiated and packaged. Approximately 50 million cells of each HyperAcute Melanoma cell line are given by intradermal injection with each treatment.

According to the American Cancer Society, cancer of the skin is the most common of all cancers. Melanoma accounts for less than 5% of skin cancer cases but causes a large majority of skin cancer deaths.

The American Cancer Society estimates that about 76,690 new melanomas will be diagnosed and about 9,480 people are expected to die of melanoma in 2013.

On June 1, 2012, NewLink announced results from a Phase 2 investigator-initiated study of NewLink's HyperAcute Melanoma immunotherapy product candidate in combination with Merck's Sylatron (pegylated interferon).

In the study, 25 patients (16 Stage IV patients and nine Stage III patients) with advanced melanoma were treated with 150 million cell injections weekly for 12 weeks in combination with an eight week course of pegylated interferon. Trial endpoints included clinical response, overall safety and correlative findings for observed anti-tumor effect.

Researchers noted that 21 of the 25 patients completed the trial, with four stopping due to progressive disease. HyperAcute Melanoma was well tolerated without significant grade 3 or 4 toxicities associated with the vaccine. By Response Evaluation Criteria In Solid Tumors (RECIST) criteria, of 16 stage IV patients, there were two complete responders (CR), two with stable disease and three with no evidence of disease (NED) after resection. Among stage III patients, 3/9 remain disease free and one patient with slowly progressive disease remained alive for more than 30 months. The median overall survival in the study was 29 months, with 50% of the patients surviving for two years and 12/25 (48%) still alive. The anti-alpha-Gal antibody values increased after vaccination in 24/25 patients by up to 100-fold. All evaluable patients seroconverted, developing asymptomatic autoimmune antibodies. Anti-tyrosinase antibodies developed in seven of 23 patients correlating with one CR and one patient NED. Vitiligo developed in 4/25 patients, correlating with two complete responses and two patients stable continuing with no evidence of disease.

"The presence of vitiligo and durable complete responses provide further evidence for clinical activity of HyperAcute Melanoma," said Dr. Nicholas Vahanian, President and Chief Medical Officer of NewLink Genetics and added "We look forward to further evaluating our HyperAcute Melanoma immunotherapy in combination with recently approved anti-melanoma agents in additional advanced clinical studies."

"We believe that lessons we are learning from trials employing our proprietary HyperAcute technology in patients with lung and pancreatic cancer can be incorporated into improved study designs for patients with melanoma as we attempt to build upon these initial provocative clinical findings," stated Charles Link,MD, CEO and Chief Scientific Officer of NewLink Genetics.

HyperAcute Prostate Cancer Immunotherapy

NewLink's HyperAcute Prostate Cancer immunotherapy product candidate consists of two allogeneic prostate cancer tumor cell lines modified to express alpha-Gal. These cell lines were chosen to provide a broad coverage of prostate cancer antigens. Each of the modified cell lines is grown in large cultures, harvested, packaged and irradiated. Each of the two vaccine components was administered separately.

On December 13, 2012, NewLink announced that the results of a Phase 1 dose escalation study conducted at the University of Nebraska Medical Center. The study was comprised of eight patients. Patients were scheduled to receive a priming dose on day one, followed by eleven boost doses every two weeks and patients received up to 12 intradermal vaccinations at doses ranging from 30 million to 500 million cells per injection. Patients were tested for safety, immunological and clinical responses arising after immunotherapy.

The study demonstrated that the immunotherapy was safe, and that the first immunization differentially increased the anti-alphaGal IgG response in all patients compared with baseline levels. These data indicated that administration of HyperAcute-Prostate immunotherapy increases the immune response against alphaGal epitopes, demonstrating the immunogenicity of the vaccine in prostate cancer patients.

The patients that received the highest dose of immunotherapy developed antibody responses against prostate tumor-associated antigens that were not seen in a control group of untreated volunteers. Data demonstrated that 37.5% (3/8) of patients responded with Prostate Specific Antigen (PSA) level stabilization for more than 100 days.

The adverse events data reported in this publication confirm the safety of this immunotherapy, consistent with previous studies on the safety of alpha-Gal-expressing allogeneic vaccines (HyperAcute immunotherapy) in the treatment of lung, melanoma and pancreatic cancers. Median overall survival for the study was 25.1 months with one patient with bone metastases surviving for more than 70 months.

"The favorable safety profile of this agent combined with evidence of vaccine induced immunologic responses in patients clearly suggests this therapy should be studied in a large controlled trial," said George P. Hemstreet, III, MD, University of Nebraska Medical Center, the Principal Investigator for the study.

Prostate cancer is one of the most common forms of cancer affecting men. The American Cancer Society estimates that 241,740 new cases of prostate cancer will occur in the United States during 2012. Increased screening over the past few decades has enabled physicians to detect prostate cancer in its early, more treatable stages. Nonetheless, while overall five-year survival rates for cases of prostate cancer approach 100%, the outlook for advanced, metastasized cases is poor, with a five-year survival rate of 29%, according to the American Cancer Society.

Tergenpumatucel-L

NewLink also presented promising results from a Phase 2 clinical study with tergenpumatucel-L, another HyperAcute platform product candidate at the ASCO annual meeting. Tergenpumatucel-L is the second most advanced product in clinical testing from NewLink's HyperAcute platform technology.

The study evaluated the safety and activity of tergenpumatucel-L in 28 previously treated patients with metastatic or recurrent non-small cell lung cancer (NSCLC). All patients in the study received tergenpumatucel-L as a single agent, which resulted in long term stable disease (>/= 16 weeks) in eight of the 28 patients, including one patient who survived 50 months.

Researchers found that the median overall survival of 11.3 months with tergenpumatucel-L as a single agent was also encouraging in this patient population. In the study, 16 of the patients whose disease progressed following tergenpumatucel-L therapy received salvage chemotherapy. The partial response rate was 31% (5/16) and an additional 25% (4/16) achieved stable disease, suggesting that tergenpumatucel-L enhanced the response rate of the salvage chemotherapy.

The safety and tolerability of tergenpumatucel-L was demonstrated in the study with no serious drug related (grade 4) adverse events reported; the most frequent drug related adverse events reported in the study were skin reactions at the injection sites.

NewLink is currently conducting a Phase 2b/3 trial comparing tergenpumatucel-L to docetaxel for patients with previously treated NSCLC. This study will compare the response rates of follow-on chemotherapy for patients whose disease progresses in either the docetaxel or tergenpumatucel-L arm to further investigate tergenpumatucel-L's potential to produce a chemo-sensitization effect.

The National Cancer Institute estimates that there will be about 228,190 new lung cancer cases and 159,480 deaths from the disease in 2013. About 85% of all lung cancers are NSCLC.

According to the American Lung Association, the five-year survival rate for lung cancer is 52.6% for cases detected when the disease is still localized (within the lungs). However, only 15% percent of lung cancer cases are diagnosed at an early stage. For distant tumors (spread to other organs) the five-year survival rate is only 3.5%. Over 50% of people with lung cancer die within one year of being diagnosed.

"Lung cancer continues to be the leading cause of cancer-related deaths in this country. Response rates to currently available cytotoxic chemotherapies in previously treated patients are typically less than 10 percent with median survival being less than 8 months. Immune therapies such as tergenpumatucel-L have the promise of improving the outcomes without producing excessive toxicities. If Phase 3 trials confirm these results, tergenpumatucel-L would fill a significant unmet need for these patients," said Ramaswamy Govindan, MD, Professor of Medicine, Division of Oncology, Washington University School of Medicine.

Indoximod

At the ASCO meeting, NewLink also announced results from two clinical studies with indoximod, an orally administered small molecule drug candidate that inhibits the IDO pathway.

NewLink's IDO pathway platform is focused on developing small molecule drugs that disrupt mechanisms by which tumors evade a patient's immune system. The IDO pathway regulates immune response by suppressing T-cell function and enabling local tumor immune escape. Recent studies have demonstrated that the IDO pathway is active in many cancers, both within tumor cells as a direct defense against T-cell attack, and also within antigen presenting cells in tumor draining lymph nodes resulting in peripheral tolerance to tumor associated antigens (TAAs). Cancers may use the IDO pathway to facilitate survival, growth, invasion and metastasis of malignant cells expressing TAAs that might otherwise be recognized and attacked by the immune system.

Indoximod was tested in a Phase 1 study in combination with docetaxel and in a Phase 1B/2 study in combination with dendritic cell cancer vaccine (AD.p53DC). In both studies, data indicated that indoximod was well tolerated when combined with these anti-cancer agents. The data also indicated promising signs of anti-tumor activity. Based on these results, NewLink advanced indoximod into two separate Phase 2 cancer trials in patients with metastatic breast cancer.

The Phase 1 trial of indoximod in combination with docetaxel was conducted in patients that failed prior treatments to determine the maximum tolerated dose and evaluate the safety and activity for the combination of indoximod and docetaxel. The data showed that in 22 evaluable patients, four patients ((18%)) exhibited a partial response and nine patients (41%) had stable disease. Data indicated that the combination therapy was well tolerated with no increase in expected toxicities or unexpected drug-drug interactions.

Researchers also found that the pharmacokinetic profile of the combination therapy was similar to the profile of each drug as a single agent. Based on these results, a randomized Phase 2 clinical study was initiated evaluating the potential of indoximod in combination with docetaxel in patients with metastatic breast cancer.

In the Phase 1B/2 trial of indoximod in combination with a dendritic cell cancer vaccine, researchers analyzed the effect of indoximod in 32 patients with metastatic solid tumors who failed prior treatments, 22 of whom had metastatic breast cancer. The primary objective of the study was to determine the maximum tolerated dose of the two agents when combined. Data indicated that the combination therapy was well tolerated and established the Phase 2 dose for the combination.

Stable disease was observed in three patients during the initial treatment phase of the study. Of the 22 patients in the study with metastatic breast cancer, 11 patients that showed tumor progression after treatment with indoximod plus vaccine were subsequently treated with gemcitabine-based chemotherapy. Researchers found that six of the 11 patients (54%) achieved an objective response, including a complete response in one patient who had received four prior chemotherapies.

Based on these results, a Phase 2 clinical study was initiated evaluating the potential of indoximod in combination with the cancer vaccine in patients with metastatic breast cancer. This trial will also evaluate the impact of salvage therapy for patients using carboplatin and gemcitabine.

"Taken together, we believe the data from these trials demonstrate the significant potential of indoximod and its action as an IDO pathway inhibitor to disrupt the mechanisms by which cancer evades a patient's immune system and to boost the effect of other therapies, including cytotoxic agents and cancer vaccines for the treatment of solid tumors," commented Link.

In addition to indoximod, NewLink is also developing a second IDO pathway inhibitor, NLG919, which has shown promising preclinical results and is expected to enter clinical trials by the end of 2013.

Finances

On May 6, 2013, NewLink reported consolidated financial results for the first quarter of 2013.

Total grant revenues for the first quarter 2013 were $302,000 compared with $471,000 for the first quarter 2012.

Research and development expense for the first quarter 2013 was $6.3 million compared with $3.8 million for the first quarter 2012. The $2.5 million increase was primarily due to increased manufacturing and clinical trial expense from the same period in 2012.

General and administrative expense for the first quarter 2013 was $2.0 million compared with $1.5 million for the first quarter 2012. This increase was primarily due to increases in personnel related expenses.

The net loss for the first quarter 2013 was $7.9 million or $.33 per common share (based on 23.9 million weighted average shares outstanding), compared with $4.8 million, or $.23 per common share, for the first quarter 2012 (based on 20.6 million weighted average shares outstanding). The difference in the number of weighted average shares outstanding primarily resulted from NewLink's public offering in February 2013.

NewLink had cash, cash equivalents and certificates of deposit totaled $64.0 million at March 31, 2013.

Conclusion: Buy

Analysts are predominately positive about NewLink, although Zacks has a #4-Sell rating on the stock and the company received "the dreaded one star rating" from Motley Fool readers.

On June 4, 2013, MLV Capital reiterated the firm's Buy rating and increased its price target from $18 to $24.

With a Buy rating for NewLink stock, Cantor Fitzgerald raised its price target from $18 to $25 on May 29, 2013.

On May 7, 2013, Stifel Nicolaus reiterated its Buy rating and increased its price target from $21 to $25.

On February 11, 2013, analysts at Robert W. Baird reiterated their "outperform" rating and $20 price target.

On June 1, 2012, Canaccord Genuity had a Buy rating for NewLink.

Although NewLink has been criticized for its "disjointed" clinical development of algenpantucel-L, as well as for the small size and premature termination of several trials, the company has demonstrated significant progress in developing high caliber clinical trials. A prime example is the 722 patient strong IMPRESS Phase 3 trial with algenpantucel-L.. As determined by Special Protocol Assessment (SPA), the first interim analysis will be conducted when 222 deaths are reported for the study.

The company is also continuing patient accrual in its Phase 2B/3 trial comparing tergenpumatucel-L to docetaxel for patients with previously treated NSCLC. NewLink expects to add additional sites in the coming months for this trial which has a planned accrual of 240 patients.

In addition, NewLink has launched a Phase 2 study for patients with metastatic breast cancer evaluating the combination of docetaxel with NewLink's most advanced small molecule IDO pathway inhibitor, indoximod. This Phase 2 clinical study will enroll up to 120 patients and follows the successful Phase 1b dose-escalation study of indoximod in patients with advanced solid tumors in which a favorable safety profile and promising early signs of activity were observed.

Pre-clinical data on NLG919 demonstrating on target anti-tumor effects and synergy with indoximod were presented at the American Association for Cancer Research annual meeting. Favorable oral bioavailability, pharmacokinetic and pharmacodynamic profiles were also reported. NLG919 is NewLink's second small molecule IDO pathway inhibitor. Based on these data, NLG919 is expected to enter human clinical trials by the end of this year.

In February 2013, NewLink closed a public offering with aggregate net proceeds of approximately $49 million providing NewLink with resources to advance its lead development programs to their next major data points.

Until recently, most scientists were skeptical about immunotherapy because there were very few successes after decades of research, but optimism about the future of immunotherapy dominated much of this year's ASCO annual meeting coverage. Some believe immunotherapies will become the main treatment for more than half of all cancers in the next 10 years.

In the past, many didn't take NewLink Genetics, located in Iowa of all places, seriously. Founded in 1999, NewLink has two proprietary immunotherapy platforms. The company's HyperAcute technology products stimulate the human immune system to recognize and attack cancer cells. NewLink's IDO pathway products break down the defense mechanisms of cancer cells. Results from the company's clinical trials continue to look extremely promising.

On Friday, June 7, 2013, NewLink stock rose 9% to reach a 52-Week High of $19.65. I will wait for a pullback and then plan to make a small investment in this high risk/high reward stock.

Source: Why Did Immunotherapy Pioneer NewLink Genetics Reach A 52-Week High?