Antigenics Should Emerge From Dendreon's Shadow Soon

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 |  Includes: AGEN, BMY, CVM, DNDN, GSK
by: Joseph Krueger

Active cancer immunotherapy treatment of cancer (“cancer vaccines”) refers to agents which rely on the body’s immune system to ward off cancer. Immunity against one’s own cancer can be induced (theoretically) by either applying an external stimulus to the immune system to “activate” it against the cancer, or by provoking the immune system to attack a tumor-specific protein by immunizing patients with man-made copies of that protein.

The basic premise of immunotherapy is to directly treat cancer, but after repeated failures as a single agent, it is more often used in combination with traditional treatments like radiation, chemotherapy, and surgery in order to enhance their effects. Immunotherapy does not result in the toxicity seen in these approaches and can be easily combined, allowing for a different angle of attack on cancer.

Currently no cancer vaccines are approved in the US. However, all eyes are currently on Dendreon Corporation’s (NASDAQ:DNDN) Provenge (sipuleucel-T) for the treatment of castration-resistant metastatic prostate cancer. The Prescription Drug User Fee Act (PDUFA) date for Provenge is assigned for May 1, 2010. This near event has excited investors: Shares of Dendreon went from about $5 in March 2009, to about $40 recently ($5 billion market cap).

Beyond Provenge, investors are becoming excited by a resurgence of enticing progress utilizing cancer immunotherapies: Cel-Sci (NYSEMKT:CVM) is gearing up to manufacture sufficient Multikine to run its pivotal phase III trial in head and neck cancer. Bristol-Myers Squibb Company (NYSE:BMY) announced that it will present the data from its phase III trial at the American Society for Clinical Oncology (ASCO) in June. In addition, GlaxoSmithKline (NYSE:GSK) may present mid term data on its immunotherapy phase III clinical trial in lung cancer at ASCO. In addition to these much anticipated results, there are nearly a dozen other companies who are running phase III trials utilizing active immunotherapy, and the “fever” (no pun intended) is starting to spread.

One currently overlooked company which is in fact much farther along than all the above mentioned companies is Antigenics (NASDAQ:AGEN). Since its inception in March 1994, Antigenics has been developing Oncophage (vitespen). Oncophage is a therapeutic cancer vaccine that is patient-specific, meaning it is derived from the patient's own tumor. In contrast, Provenge is a vaccine derived from an external immunogen specific to prostate cancer.

Although Dendreon’s Provenge is being touted as the first to potentially gain approval, Antigenics already gained approval for Oncophage from the Russian Ministry of Public Health for the treatment of kidney cancer patients in April 2008. The Russian registration was Antigenics' first product approval from a regulatory authority, and the first approval of a patient-specific therapeutic cancer vaccine in a major market. So even though Provenge looks to be the closest to gain approval in the U.S., Dendreon really cannot boast of being the first.

Like the dozens of companies who have come and gone trying to develop cancer vaccines to treat various forms of cancer, Antigenics has had its past failures (even Provenge failed its first trials). In 2006, Antigenics announced top-line results from the first part of the phase III study of Oncophage in renal cell carcinoma. The trial did not meet its primary endpoint, and Antigenics subsequently announced the termination of part II of the trial. In addition to this failure, based on the Russian approval, Antigenics had submittted a marketing authorization application to the European Medicines Agency ("EMEA") requesting conditional authorization of Oncophage in earlier-stage, localized kidney cancer.

Unfortunately, the Committee for Medicinal Products for Human Use ("CHMP") of the EMEA revealed a negative opinion for this approval in October 2009 and subsequently Antigenics withdrew the MAA. This decision was based on strategy and deficiencies in the trial design, not necessarily efficacy.

Like Dendreon and Provenge, Antigenics is learning from its mistakes with Oncophage and is proceeding with the trials to gain FDA approval for Oncophage for renal cell carcinoma. The Eastern Cooperative Oncology Group (ECOG) is currently sponsoring a large adjuvant renal cell carcinoma trial that stratifies patients by certain prognostic risk factors for recurrence, and puts patients into intermediate risk, high risk, and very high risk categories. ECOG is applying these definitions utlizing the data generated from the failed phase 3 trial of Oncophage in renal cell carcinoma.

In the ECOG study, Antigenics found that in the intermediate risk group, significant improvement in favor of the Oncophage arm was demonstrated. At the 2009 ASCO annual meeting, AGEN announced results of an interim analysis from the ongoing global patient survival registry, which showed that patients with kidney cancer at intermediate risk of disease recurrence demonstrated an approximately 46 percent lower risk of death when treated with Oncophage cancer vaccine after surgery compared with no treatment (n = 362; P < 0.05; hazard ratio = 0.54).

This study followed patients until March 2010, an additional three years from closure of the initial trial, providing more than five years of data collection following the enrollment of the last patient in the trial. Perhaps more importantly to investors, the trial follow-up was scheduled to be completed just last week. Antigenics has not yet announced that they will release the concluding data from March at ASCO in June, but in the tradition of “late-breaking-abstracts”, which makes ASCO a much watched event, I expect to hear about this data soon.

But this is not all investors may hear about soon: Oncophage is currently in Phase 2 clinical trials in glioma, a type of brain cancer. This study is being lead by the Brain Tumor Research Center at the University of California, San Francisco ("UCSF"), with grants from the American Brain Tumor Association and the National Cancer Institute Special Programs of Research Excellence. Phase 1 results presented at the Society for Neuro-Oncology Annual Meeting Conference in November 2008 showed that Oncophage vaccination following brain cancer surgery increased overall median survival to approximately 10.5 months. That's with four patients surviving beyond 12 months and one patient surviving almost 2.5 years. The study also showed that all 12 treated patients demonstrated a significant immune response after vaccination with Oncophage (P < 0.001) and that patients with minimal residual disease at time of first vaccination (n = 7) were more likely to survive beyond nine months compared with patients with significant residual disease.

Interim data from the Phase 2 portion was presented at the Society for Neuro-Oncology meeting in October 2009. This data showed a median survival of 10.1 months in the first 20 patients treated with Oncophage, and that to date six patients (30 percent) had survived at or beyond 12 months. This early data shows an improvement in overall survival over the previous long-established historical median survival of 6.5 months, and is also slightly favorable to the recently reported median survival of 9.2 months with Avastin (bevacizumab) in patients with recurrent high-grade glioma. UCSF also recently initiated an additional Phase 2 clinical trial in newly diagnosed glioma testing Oncophage in combination with Temodar (temozolomide). Antigenics has stated that it anticipates updating on this trial in mid 2010. Given the timing, I would also expect to hear a significant update at this trial around ASCO time.

In addition to its testing in phase III clinical trials for the treatment of renal cell carcinoma, Oncophage has been tested in a phase I trial for the treatment of metastatic melanoma, and in Phase 1 and Phase 2 clinical trials in a range of indications. Antigenics is exploring the steps necessary to seek approval of Oncophage in other markets directly through one or more partnering arrangements.

The company has stated that it has had formal and informal discussions with international regulatory authorities, key opinion leaders, and consultants with country-specific regulatory experience regarding potential applications for full or conditional marketing approval, and/or named patient programs. Antigenics has stated that it will seek a meeting with the FDA to discuss the results of the updated analyses from the Phase 3 renal cell carcinoma tests to determine whether there is an opportunity to file a BLA on the basis of these results.

Antigenics has about $20 million in cash, which the company states should fund it into mid 2011 at its current burn rate of $16-18 million. Antigenics does have incoming cash flow, and was even cash flow positive last quarter due to milestone payments and licensing fees from its QS-21 investigational vaccine adjuvant.

Over a dozen experimental vaccines containing QS-21 are in clinical-stage development; some by giant partners such as GlaxoSmithKline. Antigenics is entitled to receive milestone payments as these vaccine programs advance in development as well as royalties for at least 10 years after commercial launch.

With a market cap of about $80 million, a vaccine that is the truly first-in-class, partnerships, and far-along trials, AGEN seems undervalued. Compared to the massive market cap of Dendreon, it seems a steal. I expect that investors will take notice of AGEN now, given all the recent excitement DNDN is spreading. The near catalysts mentioned could have a dramatic effect on the company’s share price and future potential, and between now and ASCO should be an exciting time for AGEN investors. I look forward to seeing where AGEN goes in the next couple months.

Disclosure: I have a long position in AGEN