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David Sobek
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I have a PhD in political science and have been investing for well over a decade. I generally follow small cap biotechnology, MLPs, and mining companies. I hope to provide my thoughts on both topics of interest to investors and particular companies. See all of my reports at... More
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Sobek Analytics
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The Causes of War
  • OncoSec And The Quest To Develop A Safe And Effective IL-12 Based Treatment  0 comments
    Feb 1, 2013 10:38 AM | about stocks: ONCS, INO, ZIOP

    IL-12 is a potent cytokine that plays an important role in the adaptive immune response. Adaptive immunity allows the body to recognize objects as "not-self" and direct a specific immune response against these foreign bodies. Robertson and Rix (1996) note that IL-12 is perhaps "the most potent known stimulus for IFN-γ production by normal lymphocytes," which is important as IFN-γ has known anti-tumor effects (Schroder et al 2003). Despite having the ability to stimulate an immune response against tumors, early clinical trials using recombinant IL-12 were quite disappointing as researcher found that some treatment regimes were unexpectedly toxic. For instance, Cohen (1995: 908) describes a clinical trial that had 2 patients die from recombinant IL-12 at doses "that had previously proved tolerable." While these effects appeared linked to the way in which the cytokine was dosed, it highlights the difficulty of using recombinant IL-12. More recently, however, some researchers have had more success (see Younas et al 2004) but IL-12 has yet to live up to its early promise.

    One solution to the issues associated with recombinant IL-12 is to get to get the body to produce natural IL-12 and trigger an immune response. Perhaps, the most effective way to do this would be to introduce the IL-12 coding DNA into the cell. Once in the cell, the DNA would stimulate the production IL-12, which would create an immune response against the cancer cells. The transport of the IL-12 coding DNA across the cellular membrane, however, is a major hurdle. Viral vectors are often used to replace genes within cells but this can be problematic when one wants short-term expression (such as with a cytokine like IL-12). A plasmid DNA-based delivery method might make more sense but getting the plasmids through the cellular membrane is also quite difficult. Ziopharm is attempting to address these issues through the Rheo Switch Therapeutic System™ (RTS), which I have discussed in a previous article. OncoSec Medical Incorporated (OTCQB:ONCS), however, is working on another method to transport plasmid encapsulated DNA-IL12 that involves electroporation.

    Electroporation is a well validated method for getting DNA into cells. Neuman et al (1982) found that an electric impulse of 8 kV/cm for 5 microseconds "leads to an enormous enhancement of DNA transport across cellular membranes." Heller and Heller (2011: 161) similarly note that electroporation "has been used to deliver many different genes with therapeutic potential and has been tested in several animal cancer models." Lucas et al (2002) and Lucas and Heller (2003) found that plasmid delivery of IL-12 in an animal model of melanoma resulted in significant benefits both locally and systemically. Given the validation of electroporation in delivering DNA into cells, it seems to be a natural candidate to be used with DNA IL-12.

    While there is significant pre-clinical research on this approach (electroporation to transport IL-12 into cells), there have been few trials investigating this technique in humans. One of the only trials was described by Heller and Heller (2011: 162) and is from a phase I trial by Inovio (NASDAQ:INO) in metastatic melanoma:

    Tumor necrosis was observed in most electroporated lesions by day 11 and IL-12 expression was detected at all electroporation sites including at the lowest dose tested (0.1 mg/mL). In addition to the localized response, two patients of the 19 patients with untreated lesions had a complete response in distant nontreated metastases. A third patient who received chemotherapy with DTIC following the IL-12 gene therapy also had a complete response in distant nontreated metastases. These responses have persisted to date (>2 years in all cases).

    These results are clearly encouraging in that they saw both local and systemic effects and the responses appear durable. OncoSec acquired these assets from Inovio in 2011and is currently testing this approach in three type of cancer (metastatic melanoma, Merkel cell carcinoma, and cutaneous t-cell lymphoma).

    In general, then, the OncoSec treatment is intriguing as it combines two parts that appear independently validated. For instance, IL-12 clearly has an effect on tumors, although properly harnessing that potential in a human therapeutic setting has proven quite difficult. In addition, electroporation is quite capable of getting plasmid encapsulated DNA through the cellular membrane. The key question, then, is if the combination of these two parts is sufficient to exploit the anti-tumor effects of IL-12 while minimizing the potential toxicities. While the phase I trial seems to indicate this, it clearly needs more corroboration in larger phase II trials.

    OncoSec is currently undertaking a number of larger phase II trials to more clearly establish the efficacy of their technology and method. They reported positive preliminary data from their phase II metastatic melanoma trial, where "ninety-five percent of treated lesions demonstrated response at Day 39 (5 percent progressive disease, 14 percent stable disease (NYSE:SD), 42 percent partial response (PR), 39 percent complete response (NYSE:CR)). All treated lesions at Day 90 (5 percent SD, 50 percent PR, 45 percent CR), and at Day 180 (33 percent PR, 67 percent CR) demonstrated a response." The company also had some additional signals of activity in their merkel cell carcinoma phase II trial but this data is still quite early. As with the phase I trial, these results remain encouraging but before drawing any clear conclusions one needs the complete data set.

    OncoSec represents an interesting risk/reward. Its technology and use of IL-12 seem validated from a mechanism of action perspective but clearly clinical risks remain. The early trials certainly are encouraging but it is almost impossible to extrapolate ultimate efficacy from phase I trials. The company also needs capital and will ultimately need to raise more cash. That being said, they likely have enough cash to make it to an interim look at the cutaneous t-cell lymphoma trial and more interim data from the metastatic melanoma and merkel cell carcinoma trials. So while risks remain (clinical and dilution), it seems that with a market capitalization of only $18 million a lot of negative news and expectations are priced into the stock. This would imply that success in any of the phase II trials would have a significant effect on valuation. As such, OncoSec represents an intriguing risk/reward at these prices. At the very least, this is an under the radar company/stock that is worth watching to see how the data develops in their three trials.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: ONCS, INO, ZIOP
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