Seeking Alpha
Long-term horizon, biotech, gold & precious metals, long/short equity
Profile| Send Message|
( followers)  

Editors' Note: This article covers a micro-cap stock. Please be aware of the risks associated with these stocks.

Glioblastoma multiforme [GBM] can be said to be the mother of all cancers. It is by far the most lethal and aggressive of brain cancers, if not all cancers. Median survival time without treatment is only 3-4 months. A couple of factors make this type of cancer so aggressive. The first is the speed with which the cells it affects, called astrocytes, reproduce. The second is the function of the cells themselves. Astrocytes regulate brain activity and control blood flow to and from the brain as well as through the spinal cord. This means the cancer can spread extremely quickly, and to any area of the brain and spinal column. Thirdly, GBM, unlike most cancers, is necrotic, meaning it rots healthy brain tissue as it spreads. Fourth, due to the star shape of the cells it affects, the tumor reaches out in all directions, hooking into new parts of the brain like an octopus, making it nearly impossible to remove completely. Recurrence is described by many doctors as "inevitable".

So why would a biotech company try to attack GBM of all solid tumor cancers, it being so difficult to manage? One possible answer is that if a therapy can work on GBM, the most lethal and impossible to remove of all tumor cancers, it can a fortiori work on other less aggressive, non-necrotic, more manageable ones. Successfully treating GBM will have enormous implications for the entirety of oncology, and would change the field as we know it.

Three companies are currently after this prize. They are Agenus (NASDAQ:AGEN), Northwest Biotherapeutics (NASDAQ:NWBO) and ImmunoCellular Therapeutics (NYSEMKT:IMUC). Much has been written about all three, though this article will compare 1) science and approach, 2) history, 3) clinical trial progress and 4) cash position step by step for each company to present a full picture of what is going on in this all too crucial race against this all too lethal disease.

First, The Current Standard of Care

The variety of cells that these tumors contain makes glioblastoma very difficult to treat effectively. Some cells may respond well to some therapies, and not at all to other therapies. As a result, the current standard of care combines three therapeutic approaches: surgical resection, radiation, and chemotherapy.

The tumors spread through the brain in a 'tentacle fashion', and can cause long-term damage by putting pressure on key areas. As a result, once diagnosed, the quicker these tentacles can be removed by surgery, the lower the likelihood of long-term negative effects. Because the tumor or tumors are so interlocked and webbed within the brain tissue, in order to define the line between the cancer and health tissue, a fluorescent dye known as 5-aminolevulinic acid is used, but even then not everything can be removed. The second element of treatment is a combination of radiation and chemotherapy. The current preferred chemotherapy drug is Temozolomide; currently manufactured and marketed as Temodal by pharma giant Merck (NYSE:MRK).

The main problems associated with current standard of care revolve around efficacy-the treatment only improves median survival by 10 months on average-and the quality of patient life while undergoing treatment, which I don't need to point out.

Now a look at three of the companies trying to replace this standard of care with their own treatments. The first I will consider is Agenus.


Science and Approach

Agenus' candidate is a pair of vaccines called Prophage, one for newly diagnosed GBM, one for recurring. The vaccines contain what is called an 'antigenic fingerprint' of the patient's cancer. The fingerprint is autologously manufactured in vitro from a resected tumor using heat shock proteins [HSPs], which are proteins that mold themselves around antigens, forming complexes. These complexes are then reintroduced into the body, enabling the immune system to recognize them. The body then directs the immune system to target any cancer cells that also have this antigenic fingerprint, or HSP complex. As we'll see moving forward, Agenus uses an autologous in vitro approach to treating GBM as do the other two companies, but Agenus is the only one to make use of HSPs in doing so.

This is an advantage over the current standard of care for a couple of major reasons. The first is that the treatment will only harm cancerous cells. Healthy cells are not affected. This means that the patient will experience a much-improved quality of live compared to that of a patient undergoing chemotherapy and radiotherapy treatments. Since the vaccine is completely autologous and nothing foreign from the patient's body is included, there are, or should be, very few side effects. Additionally, the Prophage vaccines are administrated via a simple intradermal injection. This vastly reduces the time a patient has to spend in hospital, undergoing lengthy treatments.

Agenus manufactures and administers the treatment over a number of steps. First, surgeons remove a small amount of tumor tissue. Second, this is shipped to Agenus in Massachusetts. Third, the company produces the vaccine, which takes 3-4 weeks. Finally the vaccine is shipped (frozen and with a shelf life of 18 months) to the physician and administered.


Prophage has a history dating back 20 years. The project was first conceived in 1994, 6 years before the company went public. Back then Prophage was called Oncophage and it was being developed for melanoma instead of GBM, and Agenus was called Antigenics. Oncophage failed miserably at Phase 3 in that incarnation for procedural rather than scientific reasons, as the company could not successfully manufacture enough vaccines for each patient in the trial to begin with. There was not enough money to try again at the time.

Oncophage was saved by one Dr. Andrew Parsa, who took the treatment approach under his adoptive wing because he liked the concept and results despite the procedural failure, and secured funding from the National Cancer Institute to start trials anew. On Dr. Parsa's initiative, Oncophage's new cancer of focus became GBM. Later on, it was renamed Prophage. Twenty years later, we are now at phase 2 trials.

Clinical Trial Progress

So how close is the treatment to approval? Obviously, this is difficult to say. All we have to go on is recent trial results. Agenus recently reported interim results of a phase 2 trial in patients with newly diagnosed GBM treated with Prophage Series, in combination with the current standard of care. The results showed an almost 18-month median progression free survival, which represents a 160% increase versus current standard of care alone.

In Agenus' words:

The Phase 2 trial of HSPPC-96 [Prophage's technical name] in patients with newly diagnosed GBM includes 46 patients treated at eight centers across the US. Patients were treated with radiation and temozolomide as the standard of care in addition to HSPPC-96 vaccination. Analyses of data collected to date show a median PFS of 17.8 months with 63% of the patients progression free at twelve months and 20% progression free at 24 months. These results indicate considerable improvement when compared to patients treated with the standard of care (radiation plus temozolomide), which is 6.9 months.

Furthermore, median overall survival, which is the primary endpoint of the trial, was shown to improve from 14.6 months to 23.3 months. Based on these findings, Agenus announced its plans to hold an end of Phase 2 meeting with the US Food and Drug Administration to discuss a Phase 3 trial. If, and when, this trial takes place, and assuming success, it could lead to marketing approval of the Prophage Series vaccine as a treatment for patients with GBM as early as 2015.

Equally interesting is Agenus' phase 2 trial for recurring GBM, which is a much bigger trial at 222 patients and could possibly qualify as registrational at that size. This one is scheduled for results by April 2016. As both Prophage vaccines are scheduled for big results in roughly similar timeframes, good results for one could have the effect of grandfathering the other into approval.

Cash Position

Finally, a look at the company's finances. Addressing the finances of a junior biotech company seeking FDA approval is often misleading, as the road to approval can be costly and non-productive (in the sense that the company is unlikely to be generating any retainable earnings). That said, let us take a look. The company is currently valued at around $90M. During Q3 2013, it generated $736,000 in revenues, down slightly from $807 during Q2 2013. R&D costs and SG&A costs totaled $7.4M, and the company reported a net loss for the period of $7.3M. It has $30.2M in cash with an average burn rate of $7.4M over the last 4 quarters. That gives it enough at this rate for 4 more quarters, unless that rate goes up, which is likely. Agenus is currently not funding the Prophage trials, but only the manufacturing of the vaccine for them, but it is fully funding the trials for another of its candidates, HerpV for genital herpes, the costs of which will likely rise.

Northwest Biotherapeutics

Science and Approach

Northwest Biotherapeutics' vaccine candidates for GBM have a different approach to treatment from Prophage. One candidate is called DCVax-L. The DCVax-L treatment is also autologous and makes use of the tumor itself, presenting the same advantages over standard of care that Prophage does, but instead of using HSPs, it uses dendritic cells. The leaders of the immune system, dendritic cells are produced from the patient's white blood cells, and when combined with the tumor cells and readministered as a vaccine, teach the immune system to recognize and destroy cancer cells.

The second candidate is called DCVax-Direct. It is slightly different in that, while autologous, it is not manufactured outside the body and needs no external tumor sample to interact with in order to activate. DCVax-Direct is not specifically designed for GBM, but rather for all inoperable solid tumor cancers, of which GBM is oftentimes one. The science behind DCVax-Direct is less well known than DCVax-L in terms of how it works, but the basic idea is to isolate and reinject semi-mature dendritic cells into the tumor which then recognize tumor markers on site and present to T-cells.


NWBio was founded in 1996, approaching its 18th birthday next year, only two years younger than Agenus and through a comparable amount of anguish. When it went public in 2002, it was focusing on DCVax-Prostate, a candidate that is now on hold because, at the time, the company did not have the money to fund the size trial the FDA was demanding for a phase 3. Data for DCVax-L phase 1 starting coming in in 2004 and were impressive enough to the point that NWBio switched its focus away from DCVax-Prostate and over to DCVax-L. Since GBM is much less common than prostate cancer, the company thought it could more easily fund what would end up being a smaller phase 3 trial with less patients.

Then what happened was strange and terribly sad, to say the least. The trial design included an FDA-mandated placebo arm. DCVax-L was among the first ever autologous vaccines involving live patient cells that required a placebo disguise. Unfortunately, whoever was in charge of designing the placebo failed, because it was distinguishable for whatever reason from the DCVax-L arm, and patients in the control arm started dropping out of the trial, looking for alternatives. This delayed the trial by about a year, and then the Great Recession hit and delayed it again for lack of funding for another 3 years, resulting in 4 years of delays. Anyone wondering why DCVax-L phase 3 has been ongoing for nearly a decade now knows the answer.

As for DCVax-Direct, its history is a lot simpler. A phase 1/2 trial began in June, and as it is unblinded, initial results are expected within the next few months.

Clinical Trial Progress

DCVax-L is now in the thick of phase 3, and phase 1/2 results were very positive. The treatment of newly diagnosed GBM patients with DCVax-L showed a delay in the median time to recurrence or progression of disease from 6.9 months (with standard of care treatments) to two years. Furthermore, DCVax-L increased median overall survival from 14.6 months with standard of care to 3 years in patients treated with DCVax-L.

The Phase 3 trial is underway in the UK (currently at one site, soon to be four), Germany (at a planned 20 sites) and the US (at 55 sites). The company expects to complete it fully by Q3 2014, which could potentially mean top line results reported before the end of 2014.

DCVax-Direct initial results are expected at the beginning of 2014.

Cash Position

Northwest is in a better cash position than it has been in for years. Having just financed on a sizable bump in its share price at $4.50 a share, it raised $23.5M. Added to the $7.4M on its last balance sheet, that puts it around even with Agenus at $30.9M. It won't last long though, with an average quarterly burn rate of $19.9M. It will, however, get it through the initial results on DCVax-Direct, after which it will likely finance again after a bounce, if the initial results are positive.

ImmunoCellular Therapeutics

Science and Approach

Finally, a look at the third company on the list, ImmunoCellular Therapeutics. ImmunoCellular's candidate is a GBM treatment called ICT-107. ICT-107 is a personalized dendritic cell vaccine that works in almost exactly the same way as DCVax-L-by activating a patient's dendritic cells against specific tumor-associated antigens. There is one key difference though. In DCVax-L (and Prophage, too0, the patient's own tumor is used to pick up antigen markers. With ICT-107, synthetically produced tumor antigens are used to stimulate the dendritic cells. The most obvious advantages are ease of manufacture and cost. It is much simpler and cheaper to combine off the shelf antigens with a patient's blood cells than it is to remove a tumor, ship it, take a piece of it, culture it exactly right, and then reinject it. The disadvantages are not known yet, but conceivably could be that the synthetic antigens, being less personalized, could end up being less effective in activating the dendritic cells.

Immunocellular believes that it has isolated a number of tumor antigens that are common in cancer stem cells called Her-2/neu, AIM2, and TRP-2. ICT-107 is geared towards these three specific antigens plus another three found on daughter tumor cells, altogether targeting six. Agenus' Prophage and Northwest's DCVax, by contrast, are targeting as many as are picked up in vitro naturally autologously.


Immunocellular's history is much less tortured than that of Agenus or Northwest. Founded in 2004, it is much younger than the other two, and only began its first trials in 2007. It has had far fewer near death experiences than Agenus or Northwest, and its top executives probably have a lot less stress-induced grey hairs. If Immunocellular's ICT-107 actually works, it will easily have had the smoothest path to approval of the three. Whether it hits a significant snag or two as the others did with funding or embarrassing procedural failures, still remains to be seen. So far though, so good.

Clinical Trial Progress

Last week, the company reported data from the ongoing Phase 2 trial of ICT-107, revealing that eight out of 16 patients treated with the vaccine survived longer than five years. Furthermore, of these eight, seven are still living, with the length of survival ranging from 60.7 to 82.7 months after diagnosis. In addition, four out of these seven are disease free. These results are good, but should be read with caution-small scale results are often difficult to replicate on larger scale trials-but they have caught the attention of the investment community nonetheless. IMUC jumped 54% on that data release, and now sits nearly 22% higher than it did in the days preceding it. Estimated primary completion date for the trial is October 2014.

Again, a quick look at the finances. The recent surge in price means the company is currently valued at just over $184M at yesterday's close. During Q3 2013, the company did not generate any revenues. R&D costs and SGA costs totaled $2.4M, and the company reported a net loss for the period of $3.79M. With $29.4M cash on hand, it is in the same boat as Agenus and Northwest, but with a much smaller average quarterly burn rate of $2.4M, giving it lots of room to run for now. The reason it is so low is that, again, ICT-107's antigens are synthetic off the shelf. Agenus and Northwest have to poke at a real tumor, which is an order of magnitude more expensive.

Investment Thesis

For those considering investment in any one of these companies, there are a few things to consider. First and most importantly, all of them - Agenus, NWBio, and Immunocellular - are development stage with no significant revenue streams, and the value of their securities depends entirely on eventual approval of one or more of their candidates. Despite progress, there is never a guarantee that approval for any of them will come, and even if it does, whether commercial success will follow.

That said, the three carry varying degrees of risk.


Agenus may be the least risky of the three, simply because with Agenus, there are so many candidates in the pipeline of which Prophage is only one. Even if Prophage ultimately fails, AGEN will still hold value due to its other candidates. These include QS-21 Stimulon, a vaccine adjuvant being studied in over 20 disease indications, partnering with big names like GlaxoSmithKline (NYSE:GSK) and Johnson and Johnson (NYSE:JNJ). Currently of note is Glaxo's phase 3 malaria vaccine, which, if successful won't translate into much revenue for Agenus, but will speak volumes for QS-21 and give the company some much needed good press. More importantly is Agenus' HerpV vaccine candidate, the only pipeline candidate fully funded by Agenus, and which would be huge financially for the company. More about HerpV, its current position and prospects can be found in this article. Results in a phase 2 are so far positive, but crucial post booster shot data will be available by next year. A stake in AGEN would be a stake in all of its candidates, so the risk is a little more spread out. The stock is much depressed since the company reported Glaxo's melanoma vaccine failure containing QS-21 on September 5 and has not yet recovered.

Northwest Biotherapeutics

NWBio is a bit riskier than Agenus because it only has two active pipeline candidates - DCVax-L and DCVax-Direct. Also, both of these candidates are very similar, unlike QS-21, HerpV, and Prophage, which are all quite different from one another. With Northwest, the most immediate pending catalyst will be the initial results from the DCVax-Direct phase 2 trial, which should be coming in at the start of 2014. The trial is unblended and results will be published as they become available. Any report of tumor shrinkage will send NWBO soaring, as DCVax-Direct is such an exciting treatment applicable to all solid tumor cancers. It will also have great implications for DCVax-L, which is based on similar science. While DCVax-L will be more important for the company financially medium term as it will likely be the first of the two approved, DCVax-Direct is perhaps more important long term. Failure for both these candidates will likely spell the end of the company, and investors should note this well.

After a brief pop due to a Fox News report on DCVax-L, NWBO has settled to around $4.15 from previous support at $3.00, and will likely stay in this general vicinity until DCVax-Direct initial results are published.

Immunocellular Therapeutics

While Immunocellular has its advantages over the other two in terms of cost and has impressive trial results thus far, it is definitely riskier than Agenus, though it is hard to say if it is riskier than Northwest. Like Northwest, it has only one main candidate (ICT-107) and other candidates based on similar scientific concepts involving cancer stem cells. An added risk associated with this company is that the closest major catalyst is a year away. ICT-107's phase 2 is scheduled for completion at around October 2014 according to, so IMUC could stay stuck in a tight range until then, simply burning cash. The positive results recently reported were for a phase 1 that began in back in 2007.

IMUC stock is also a bit frothy right now, with new buyers just recently entering the market on the good news above. I doubt any similar news will be coming out for some time, so the stock will likely drift back down as 2014 progresses. Then it all depends on ICT-107's phase 2 trial.


FDA approval success for any one of these companies would be a very, very big deal. The advantages of Agenus and Northwest are that the cells are treated with the tumor itself, Prophage with HSP's and DCVax with dendritic cells, allowing the immune system to pick up whatever markers it wants from the tumor naturally. While this may be more effective in the end (we do not know yet), it severely ups their costs of business and means Immunocellular will have the cheapest treatment option ICT-107 succeeds. So far Immunocellular has shown that its synthetic antigens work, at least in early stage phase 1 trials. All three treatments are showing encouraging signs right now, and in the very hopeful event that all three are actually approved, there will be a veritable arsenal of safe, low side effect treatments against GBM that doctors could choose from. Northwest's DCVax-Direct is the wild card, which if effective, would apply to all solid tumor cancers operable or not, and not just GBM.

Source: An In-Depth Look At 3 Companies Fighting GBM Brain Cancer