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By Jake King

ImmunoCellular Therapeutics' (IMUC) on Wednesday the 7th said that the company expects trial results in the fourth quarter of 2013 or first quarter of 2014 from its ongoing Phase IIB trial of the dendritic cell-based immunotherapy ICT-107 in patients with newly diagnosed glioblastoma. This small-cap's investor base is largely retail, suggesting a run-up to the trial results; see Celsion (CLSN) from August '12-January '13 for an example of what the retail community's infatuation can do for a stock ahead of exciting top-line data. While IMUC began a pre-release run-up in July, we expect the stock to stagnate until later in the third quarter, as top-line results aren't expected until 4Q13 at the earliest.

PropThink covered Immunocellular in detail in February of this year. Dr. Dee Kotak outlined why he's bullish on the forthcoming ICT-107 trial results in GBM. Depending on the trial meeting its primary endpoints with statistical significance, the results could be robust enough for submission to the FDA based on the Phase IIb data-set, pending a possible bridging study for the currently utilized -107 (the company switched manufacturers mid-study).

Recall that analysis of the Phase IIb trial begins after 64 events (deaths). On June 7, IMUC announced that following a pre-specified interim analysis, an independent Data Monitoring Committee recommended continuing the trial through completion. The interim look was triggered by 32 events. While IMUC is guiding for top-line data in 4Q13 or 1Q14, this is based on event-rate assumptions and is by no means a hard deadline. ImmunoCellular has no plans to announce the 64th event or beginning of the data analysis. The company anticipates 3-4 months (top-line data 6 weeks after database lock) for complete analysis, substantially longer than other similarly sized oncology programs.

We expect the stock to again run into the expected results, with some momentum beginning again early next quarter or following the company's third quarter conference call, as management may hint at timing of the 64th event.

IMUC's previous CEO, Dr. Manish Singh, who bowed out late last year, was known for talking up the possibility of an early submission based on the current study. But CEO Andrew Gengos, who joined the company in December of 2012, is walking down expectations for a NDA submission following completion of the study. Notably, Gengos spent time on Wednesday's conference call discussing what "success" might look like in the trial. Remember, the -107 study is 80% powered to show a 9-month OS benefit in the -107 arm. Gengos mentioned that success might look like an OS benefit trend or positive results in a sub-group of patients, essentially suggesting to investors that not achieving a 9-month OS benefit isn't the end but will guide the company in planning a Phase III program. Gengos is clearly taking a more conservative approach then Dr. Singh and tempering investor expectations ahead of the event.

Still, an analyst on the Wednesday conference call asked what the company would do if ICT-107 achieves a 9-month OS benefit with statistical significance. Gengos responded that success, "as you put it" would be presented in the best possible light to the FDA. Although Gengos noted the possibility for submission and that they would do everything feasible to get positive results in front of the FDA, a "Phase III program" was mentioned repeatedly.

It's worth noting that the company's other pipeline programs - ICT-121 in recurrent glioblastoma and ICT-140 in ovarian cancer - are beginning to progress. In June, an investigator-sponsored Phase I, 20-patient study of ICT-121 was initiated at Cedars-Sinai Medical Center. ImmunoCellular is providing the ICT-121 vaccine. The primary objective of the open-label trial is to assess the safety and tolerability of ICT-121. Secondary objectives include OS and PFS at six months after surgery. Like the ICT-107 trial, patients will be HLA-A2 positive. The company anticipates enrolling 1-2 patients per month, which could take up to 20 months to complete. Although the trial is currently open, no patients have yet been enrolled. The delay, according to IMUC, is related to manufacturing.

ImmunoCellular plans to conduct an open-label Phase II trial of ICT-140 in 30 patients with ovarian cancer who are at high risk of having a first recurrence. 20 patients will be treated with standard of care plus ICT-140, while 10 will receive standard of care. Should the results from the first cohort of patients support further enrollment, the company will randomize another 20 patients to be treated, plus 10 more comparator patients. The Phase II should begin in 1Q14.

ImmunoCellular ended the quarter with $25.5M in cash. Cash use in the first half of the year totaled $4.1M following the receipt of $3M from warrant exercising. In addition, recall that IMUC entered into an At-the-Market sales agreement on April 18, 2013 for up to $25 million in aggregate. The company raised $400K during Q2 through the ATM, and since the end of June raised another $2.1M, for $2.5M net from the ATM facility. ImmunoCellular expects to continue at a $800K-$1M monthly burn rate (management indicated the top-end of this range through year-end), suggesting sufficient capital to reach key milestones.

Investors have been vacating IMUC since the quarterly update on Wednesday given the unclear timelines on the top-line release; the stock is down 12%. We expect the stock to continue trading sidewise through this month and September as traders put money to use elsewhere. Given the high volatility that will be associated with the event, an options straddle may be the ideal way to be involved.

You can read our previous coverage of ImmunoCellular here.

Disclaimer: PropThink is a team of editors, analysts, and writers. This article was written by Jake King. We did not receive compensation for this article, and we have no business relationship with any company whose stock is mentioned in this article. Use of PropThink’s research is at your own risk. You should do your own research and due diligence before making any investment decision with respect to securities covered herein. You should assume that as of the publication date of any report or letter, PropThink, LLC and persons or entities with whom it has relationships (collectively referred to as "PropThink") has a position in all stocks (and/or options of the stock) covered herein that is consistent with the position set forth in our research report. Following publication of any report or letter, PropThink intends to continue transacting in the securities covered herein, and we may be long, short, or neutral at any time hereafter regardless of our initial recommendation. To the best of our knowledge and belief, all information contained herein is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable, and not from company insiders or persons who have a relationship with company insiders. Our full disclaimer is available at www.propthink.com/disclaimer.

Source: ImmunoCellular Stagnates With Trial Read-Out Still Months Away