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Cytokines are signaling molecules comprised of proteins, peptides, or glycoproteins produced by immune cells to communicate with other cells to induce an immune response. Interleukin-12 (IL-12) is a promising cytokine being evaluated as a cancer treatment due to its ability to elicit an immune response via CD8+ killer T cells against cells having IL-12 in their microenvironments. Helping to add to a robust, longer-term response, IL-12 also helps to generate CD4+ T cells, also known as memory T cells. Growing evidence indicates that CD4+ T cells are even required for the generation and maintenance of effective CD8+ cytotoxic response, a phenomenon known as CD4+ T-cell help. This maintenance indicates a long-term (robust) activity necessary for the continued effectiveness of the cytokine.

While IL-12 has been shown to be an effective cancer tumor fighter, the cytokine's promising effectiveness is offset by an extremely cytotoxic profile that renders its safety profile unacceptable when injected directly into a tumor. Many targeted chemotherapy and targeted radiotherapy treatments have garnered regulatory approvals by maximizing the safety profile of the respective therapies by reducing systemic exposure to the cytotoxic agents. Likewise, promising trials are already underway evaluating different means of administering IL-12 in a targeted manner in order to maximize efficacy while improving the safety profile by reducing systemic exposure.

Two very promising biotech companies are currently evaluating their own novel IL-12 administration platforms via phase II clinical trials to fight various cancer tumors, most notably metastatic melanoma. I believe that the investment potential in these two companies involves a more in-depth investigation into their respective platforms and clinical data before long-term investment decisions should be made for either. With two very different market capitalizations but having similar pipeline progression, investors should probably begin asking themselves whether one is over-valued or the other under-valued based on the data and information I wish to present below. Armed with this knowledge and after performing additional due diligence, investors may feel a bit more confident not in predicting clinical trial outcomes, but in their choice of which likely has the greatest upside potential with greater probability of promising IL-12 treatment data coming.

ZIOPHARM Oncology, Inc. (ZIOP) was a highly diversified oncology-focused pharmaceutical at the beginning of 2013. It lead product candidate, Palifosfamide, was in phase III trials evaluating its effectiveness in treating extensive-stage small cell lung cancer (SCLC) and metastatic soft tissue sarcoma (STS). With a great deal of its valuation hinging on the late-stage candidate, the company reported on March 26th that it was terminating the development of the drug for metastatic STS due to failed progression free survival data (its primary endpoint) and focusing on its synthetic biology programs. The news sent shares plummeting, ending the day at $1.82, down 65% from the previous day's close. Tuesday's closing price of $2.27 gives the company a current market capitalization of $189.7 million.

While the company is continuing the investigation of Palifosfamide in a late stage adaptive phase III trial for SCLC with data expected in early 2014, enrollment was suspended for the trial prematurely with 188 subjects randomized. Data is expected in 1H 2014 with the patient set being followed for overall survival in order to ascertain the drug's actual effectiveness in that indication and its place in the company's pipeline, if relevant.

With hope for Palifosfamide rapidly waning, the company is progressing nicely with its IL-12 platform via phase II trials evaluating the therapy for the treatment of metastatic melanoma and in combination with Palifosfamide for non-resectable recurrent or metastatic breast cancer. ZIOPHARM's IL-12 candidate, Ad-RTS IL-12, employs the use of an adenoviral vector to deliver into patients' cells the IL-12 DNA plasmid instructing the cells to produce the IL-12 cytokine. Termed the RheoSwitch Therapeutic System™ (RTS™), ZIOPHARM gained rights to the technology via a January 2011 agreement with the therapy's developer, Intrexon Corporation. In order to control the IL-12 expression and keep its expression localized, an inducible promoter is utilized that is conditionally activated by the orally bioavailable small molecule activator ligand, INXN-1001.

This controlled IL-12 expression induces a strong immune response directly against the cells having this expression, while theoretically reducing systemic exposure to the cytokine. Via a balance of injection amount and activator ligand, most of the adenovirus-delivered IL-12 gene is at the tumor site where the immune response should occur at the tumor microenvironment. On October 25th, 2012, ZIOPHARM simultaneously announced preliminary phase I data for AD-RTS IL-12 in advanced melanoma treatment as well as phase II enrollment initiation for the therapy treating patients with unresectable stage III or IV melanoma. According to the press release, the phase II data for up to 15 patients should be available 1H 2013 - an imminent event with significant implications for the company's synthetic biologics platform, especially for the large indication metastatic melanoma.

While investors eagerly await the phase II AD-RTS IL-12 data unveiling in the coming days, ZIOPHARM released updated phase I data at the American Society for Clinical Oncology (OTC:ASCO) annual meeting held May 31 - June 4, 2013 at McCormick Place in Chicago, IL. Data from the 14 patient set were basically the same as reported on October 25th. Five of the seven patients who had received the highest doses, 100 and 160mg of INXN-1001, exhibited "compelling clinical activity" and had increased intratumoral IL-12 mRNA expression.

Likely due to the increased IL-12 levels, CD8+ and CD45RO+ (a CD4+ subset) levels were elevated in the tumor microenvironment as measured in tumor biopsy analyses. Indicating a true possible systemic immunotherapy response, clinical activity was noted not only in the injected tumors, but also in distant lesions in which the immune system had "learned" that the tumors, like the injected ones, should be targeted and attacked. The clinical responses noted included inflammation, shrinkage, flattening and depigmentation of lesions each indicating possible effectiveness, but upcoming phase II data will be the true test.

OncoSec Medical (OTCQB:ONCS) is rapidly advancing its IL-12 immunotherapy pipeline for the treatment of cancer which is also in multiple phase II trials. The company utilizes a novel electroporation approach to administer its IL-12 DNA plasmid to also instruct the targeted cells to express IL-12. Obtained from Inovio Pharmaceuticals (INO) via a licensing agreement in March of 2011, the electroporation administration platform appears to be a great fit for the IL-12 compound. Termed its ImmunoPulse technology, the device employs a handheld device comprised of six needles which are inserted into the tumor site. The needles are connected to an electrical generator that sends an electrical pulse through the six inserted needles which dramatically increases the permeability of the targeted tumor cell membranes. This electrical current allows previously-injected IL-12 DNA plasmid construct to rapidly enter the cells where it is trapped once the current is removed and the cells' membranes return to their previous state.

OncoSec currently has three phase II trials underway evaluating the effectiveness of ImmunoPulse to fight cancer, each launched in 2012. In February of 2012, the company launched its phase II trial addressing its largest targeted market group, metastatic melanoma. On November 15th, OncoSec reported interim data on the patient set. At the time of the interim analysis, 13 of 25 expected patients were enrolled and had been treated. 13 patients were evaluable at 39 days with 95% percent of treated lesions indicating response (14% stable disease (SD), 42% partial response (PR), 39% complete response (CR)). 9 patients were evaluable at 90 days with 100% of treated lesions indicating response (5% SD, 50% PR and 45% CR). Two patients were evaluable at day 180 with 100% of treated lesions indicating response (33% PR, 67% CR).

On March 25th of this year OncoSec reported its most recent trial update on the metastatic melanoma patient set. The data set analysis was on all lesions with partial or complete responses in order to ascertain durability of the treatment. Data indicated that 68% of the lesions had a durable response at three months with 45% of lesions having a durable response at six months - a seemingly robust response. According to the press release, OncoSec expects to complete enrollment in Q2 2013 with topline data expected in Q4 2013, a huge and significant event for the company's future.

On February 13th, 2012 OncoSec initiated enrollment in a phase II trial evaluating ImmunoPulse for Merkel cell carcinoma (MCC). The company expects to enroll up to 15 patients with local and distant (metastasized) Merkel cell carcinoma. Interim data were reported on October 23rd with all three patients who had received at least one cycle of the treatment demonstrating elevated IL-12 levels at three weeks relative to IL-12 levels recorded before treatment with at least one patient having increased levels of CD8+ t cells in the targeted tumors. One of the patients treated had a confirmed partial response (more than 70% regression) which persisted for about 8 months.

Of particular note about this patient was that he had progressive MCC despite previous treatment with systemic chemotherapy, surgery, radiotherapy and IT interferon - a very difficult patient to have treatment success with. On July 19th, 2012 OncoSec initiated enrollment in its third phase II trial, evaluating ImmunoPulse for the treatment of cutaneous t cell lymphoma. Although interim data has not yet been released from this patient set, the company does plan on doing such in 2013 according to its January 15th corporate update.

With interim data already presented and more significant data yet ahead, ZIOPHARM and OncoSec each have two very different platforms addressing targeted IL-12 DNA administration. Both platforms attempt to induce immune response via CD8+ against tumors externally instructed to express IL-12 in their microenvironments. With promising early data from each presented already, upcoming data will soon determine each platform's fate, at least for the IL-12 cytokine in the evaluated indications. Evaluating the information above, ZIOPHARM is a bit earlier in development with no data presented yet except for the phase I data indicating "compelling clinical activity" with increased IL-12 expression in the tumor microenvironments with elevated CD8+ and CD45RO+ levels in treated and distant tumors. Phase II interim data for AD-RTS IL-12 is imminent and could be a strong indication of the therapy's success moving forward. OncoSec has enough data from its phase II metastatic melanoma trial to indicate early success with responses in actual tumor size and progression in local and distant tumors.

If the therapy continues similar success moving forward with a robust response implied, OncoSec expects to begin enrollment in a phase IIb trial for the metastatic melanoma indication in 2013 and a pivotal trial (one in which success would lead to a regulatory filing) for MCC according to the January corporate update. OncoSec seems to have the advantage with a more advanced phase II trial underway for the melanoma indication with two other indications not far behind. ZIOPHARM has just two IL-12 trials underway. One of those trials is combining AD-RTS IL-12 with what could be an ill-fated Palifosfamide for non-resectable recurrent or metastatic breast cancer. Although still being evaluated, Palifosfamide's future should be construed as "highly questionable."

Based on the above information, it appears that OncoSec is a safer bet with regard to the IL-12 trials underway with more advanced phase II trials, more confirmatory early data and no dependency on a likely dying adjuvant drug. However, ZIOPHARM does have a chance to come roaring back with promising imminent interim data for AD-RTS IL-12 - or does it? If there was a solid side-by-side comparison of the two platforms, or something similar, a more well-defined conclusion could be ascertained by investors attempting to make an investment decision - and such a comparison has already been made. In June of 2010, Inovio announced findings of a preclinical study on Rhesus macaques comparing adenovirus serotype 5 (Ad5) vaccine, considered to be one of the most immunogenic among viral vectors administered via traditional injections to Inovio's SynCon™ synthetic vaccine.

Titled "Comparative Analysis of Immune Responses Induced by Vaccination With SIV Antigens by Recombinant Ad5 Vector or Plasmid DNA in Rhesus Macaques", the study was very revealing with regard to the direct comparisons. Most significantly was the observation that "Ad5 immunizations failed to boost immune responses following the first immunization whereas immune responses from DNA vaccination were continually boosted even after four immunizations." The failure of additional immune response after the initial treatment with the Ad5 vector, ironically, was due to the body's own natural immune response against the Ad5 adenovirus. Meanwhile, the electroporation administration of SynCon™, the same technology utilized by OncoSec for its ImmunoPulse platform, had a more robust response even after multiple treatments as responses "were long-lasting and maintained at high levels."

Additional research reveals a bit more detail on the Rhesus Macaques study. Actual data portrays the electroporation treatment in a highly positive light relative to the Ad5 administration on its own. With a great deal of data to read through, a summary of the data is bullish for electroporation versus the adenovirus. The document notes: "Enhanced IFNγ production following plasmid DNA vaccination compared to Ad5 vaccination", "DNA vaccination induces CD4+ and CD8+ T-cell responses with greater proliferative capacity", "Polyfunctional profile of CD8+ T cells demonstrates greater magnitude and functionality of DNA vaccine-induced responses", "DNA vaccination induces CD4+ and CD8+ T-cell responses with greater proliferative capacity", "Polyfunctional profile of CD8+ T cells demonstrates greater magnitude and functionality of DNA vaccine-induced responses", and "Polyfunctional profile of SIV-specific CD4+ T-cell responses following vaccination." If these data translate into comparable data with regard to OncoSec's ongoing phase II ImmunoPulse trials relative to ZIOPHARM's Ad-RTS IL-12 approach, ImmunoPulse has a clear advantage. This is speculation only and is not an indication of failure or success for each of the platforms. However, it could be construed as a valid comparison of the upcoming data at the early stages.

Tuesday's closing share price of $0.28 gives OncoSec a current valuation of $33.0 million. ZIOPHARMA's $2.27 closing gives it a valuation of $189.7. OncoSec appears to have an advantage at this stage of development for its IL-12 administration platform. ZIOPHARM is attempting to salvage the Palifosfamide program somewhat, but certainly appears to have given up hope for much of it with the termination of the metastatic STS indication and the early enrollment termination of the phase III SCLC trial. ZIOPHARM does have two phase I candidates to help with its valuation - ZIO-301 for metastatic breast cancer and ZIO-101 a mitochondrial- and hedgehog-targeted agent in early development as a cancer treatment with partner Solasia Pharma K.K.

Meanwhile, OncoSec shows a little diversification as well with an October 2012 CE mark for its electroporation administration platform for use in the European Economic Area (EEA). Although the company hasn't yet announced a launch or a partnership in the region, this regulatory approval adds to its valuation with revenue likely coming in the form of a licensing agreement or its own sales.

I will not attempt to add any conjecture about valuation for each of the two company's programs as I believe the comparison gives a hands-down victory to OncoSec. With ZIOPHARM's 5.7 times greater market capitalization than OncoSec's, I firmly believe that a correction in market capitalization is likely overdue. This could mean significant upside from here for OncoSec or a plummet for ZIOPHARM. Imminent data from ZIOPHARM could catalyze the valuation balancing or upcoming data from OncoSec could do the same. With the added CE mark under its belt, speculation on what OncoSec will do in Europe only adds to the investment interest with news that could be considered imminent from it as well.

Although I hope for success for both companies, both oncology platforms and both groups of investors, I believe investor increase should only increase for OncoSec in the coming days and decrease for ZIOPHARM as already evident by their respective 3-month stock charts. Before making a final investment decision with regard to either candidate, I advise more due diligence to confirm or invalidate my findings, and to garner a better understanding of the companies' valuation, financials, overall pipeline and probability of regulatory success.

Source: OncoSec's And Ziopharm's IL-12 Targeted Delivery Systems: Which Will Succeed?