ImmunoCellular's (IMUC) lead brain cancer drug ICT-107 has officially failed at the mid-stage level. After the market closed Wednesday, the company announced that ICT-107 did not increase overall survival in patients afflicted with glioblastoma multiforme, which was the study's primary endpoint. Yet, the drug showed a statistically significant benefit to patients in terms of progression-free survival, delaying the disease's progression by roughly two months.
With about half of the patients in the trial still alive, ImmunoCellular plans on following the remaining survivors, hoping the statistical trend changes. That said, there have been 67 patient deaths thus far, which is a fairly decent sample size. As such, I wouldn't expect much to change going forward, and holding out hope for ICT-107 is not a good reason to keep this stock in your portfolio. Miracles do happen in the biotech sector but it's always better to play the averages.
On a personal note, I am not a fan of the wording of the press release, which clearly tries to put a positive spin on this negative result by using phrases like "numerical differences". All that matters at the end of the day is "statistical differences", and there were none for the primary endpoint. It's also interesting that the title of the PR makes it sound like the trial was a success, when it wasn't.
Looking ahead to Thursday, ImmunoCellular investors need to decide whether or not to liquidate their positions, or to ignore the nasty paper losses. Here are my thoughts on the matter.
Vaccine Platform Now in Question
The biggest issue going forward is that ImmunoCellular's entire dendritic cell-based platform is now in question. Currently, the company has two other candidates undergoing clinical trials, i.e., ICT-121 for recurrent glioblastoma in Phase 1 and ICT-140 for ovarian cancer at the pre-clinical stage. Well, we now know that ICT-107 doesn't seem to work for newly diagnosed glioblastoma patients, so I don't see how ICT-121 is going to fare much better. ICT-140 is targeting an entirely different cancer type, and a less aggressive one at that. Yet, ICT-140 is still in the very early stages of clinical testing, and can't be seen as much of a near-term value driver as a result. In sum, I don't see much value in the pipeline after today's event.
Fundamentals and A Look Ahead
According to my estimates, ImmunoCellular has about $27 million remaining in liquid assets. Given their low burn rate, they should be funded for at least the next 12 months. So dilution shouldn't be an immediate concern, especially now that ICT-107 won't be entering an expensive Phase 3 trial, or so it seems.
ImmunoCellular has little to offer in terms of value now that ICT-107 failed to meet its primary endpoint. With tax season right around the corner, I think it's prudent to take the loss on this one and count it against your capital gains for the year. Implosions are part of the biotech game. As such, it's generally better to take the loss and move on to greener pastures. I personally had a small long position in ImmunoCellular awaiting these results and plan to liquidate it in the near future.
Additional disclosure: I am long IMUC but plan to reverse this position within 72hrs.