Unlike chemotherapy, which directly attacks cancer cells, immunotherapy stimulates a patient's immune system to attack tumors and ultimately prolong survival. Autologous cellular immunotherapy, such as Dendreon's (DNDN) sipuleucel-T (Provenge), uses patients' own immune cells to defend against cancer as these cells are best known as nature's adjuvants and are very powerful in eliciting an immune response. Every dose of Provenge is personalized and made to order for each individual patient. Despite the logistical and manufacturing challenges of personalized immune cell therapy, Provenge is relatively safe and can elicit a sufficient immune response against tumors to improve survival.
Before Provenge was launched in 2010 to treat advanced prostate cancer; many investors questioned whether an autologous cancer immunotherapy was commercially viable. Dendreon has shown, however, that Provenge can be both scalable and profitable, despite problems the company initially had with reimbursement. Unfortunately, Provenge's logistical requirements will ultimately limit its margins compared to non-autologous cancer therapies.
Provenge Under the Microscope - It's All About COGS
Every Provenge patient must undergo three leukapheresis procedures, where typically 1.5 to 2 times the patient's blood volume is withdrawn and peripheral blood monocytes (PBMCs) are isolated with subsequent reintroduction of the blood afterward. The leukapheresis product is then shipped overnight to one of Dendreon's manufacturing facilities and cultured (for 36-44 hours) with a single prostate cancer specific antigen (PAP) that directs the immune system to specifically target prostate cancer cells.
PAP is fused with an immune cell activator known as granulocyte-macrophage colony-stimulating factor (GM-CSF). Culturing PBMCs with the PAP/GM-CSF recombinant fusion protein results in activated antigen presenting cells (APCs), which play a critical role in triggering T-cell killing of tumors. The manufacturing of Provenge is somewhat inefficient since only about 25% of the final manufacturing product actually consists of APCs (a minimum of 50 million APCs). Once manufacturing is complete, Provenge cannot be stored and must be administered to patients within 18 hours of manufacture. Thus, Provenge is shipped overnight back to patients to be administered via intravenous infusion.
Provenge patients have to repeat this process every two weeks for three cycles. To ensure that Provenge is administered within the allotted 18 hours, Dendreon has had to build several manufacturing sites throughout the U.S. As a result of the logistical limitations mentioned previously, Provenge's margins are lower than conventional biological cancer therapies, such as antibodies, which have margins closer to 85%-90%. According to Dendreon's management, Provenge's margins currently are less than 50% and will increase to 60-70% range when the product reaches close to $500 million in sales.
New Kids on the Block: Faster, Cheaper and Better
Newer autologous cellular immunotherapies that may be more effective, as well as may overcome Provenge's logistical shortcomings, are currently being developed. Both Immunocellular Therapeutics (IMUC.OB) and Northwest Biotherapeutics (NWBO.OB) utilize patients' dendritic cells (DCS), which are more potent APCs, to stimulate tumor killing. IMUC is currently enrolling for its lead DC immunotherapy (ICT-107) in a randomized, multicenter, double-blinded Phase II study in patients with glioblastoma multiforme (GBM), a very aggressive form brain cancer.
Unlike Provenge, ICT-107 uses six tumor associated antigens to target tumor cells as well as cancer stem cells, which are more resistant to radiation and chemotherapy. Results from a Phase I study with ICT-107 were very promising. ICT-107 improved patient survival by almost two years compared with the historical standard of care. The manufacturing data released last week from the current phase II manufacturing shows production of 60 doses (30 product and 30 placebo) from a single manufacturing run. According to the IMUC company presentations, the cost per shot of vaccine would be under $500 per shot of vaccine with per shot. This compares very favorably with the cost of manufacture for Provenge which is approximately $15,000 with a retail cost of about $31,000 per infusion.
Lower Cost, Better Logistics - The Future is Here
Patients treated with either ICT-107 or the Northwest Biotherapeutics product DCVax must also undergo a leukapheresis procedure to harvest PBMCs. DCs generated from PBMCs have been shown to stimulate a stronger immune response than APCs. Thus, not as many cells are actually required for treatment. DC manufacturing has become much more efficient. As much as 90% of the final manufacturing product are DCs. One leukapheresis procedure with ICT-107 manufacturing process can produce as many as 30 doses or more as mentioned earlier.
In addition, ICT-107 and DCVax can be stored in a freezer, so patients only need to undergo one leukapheresis procedure instead of three as with Provenge. This also eliminates the need to ship the final product back to patients within 18 hours and the need to have multiple manufacturing facilities. Furthermore, DCs can be administered via intradermal injection rather than IV infusion, which is much less invasive and time consuming for patients. Without all of the logistical liabilities, margins for ICT-107 and DCVax should be in the range of 85%-90% and comparable to that of oncological monoclonal antibodies, like bevacizumab (Avastin) and trastuzumab (Herceptin) from Roche (RHHBY.PK).
All new therapeutic modalities improve with each new generation. OKT3 (muromonab-CD3), the first therapeutic antibody approved by the FDA, was burdened with a very short half-life and production of human anti-mouse antibodies because it was a murine antibody. It was not until second generation (chimeric and humanized) antibodies almost 10 years later that these problems were eventually addressed. It is just a matter of time when autologous cellular immunotherapies evolve into more commercially optimal products. But as developments ensue, there is more excitement that a portion of the market could be carved out by such technology. In a proceeding article I will discuss the differing approaches taken by these companies to that end.
Disclosure: I am long IMUC.OB.