Unum Therapeutics Files For $86 Million IPO

Summary

• Unum Therapeutics aims to raise $86.25 million in a U.S. IPO.
• The firm is in the very early stages of developing immunotherapy drug candidates for the treatment of various cancers.
• I'll provide a final opinion when we learn more details about the IPO.

Quick Take

Unum Therapeutics (UNUM) intends to sell shares of its common stock for gross proceeds of $86.25 million from a U.S. IPO, according to an S-1 registration statement.

The firm is a clinical-stage biopharmaceutical company that's focused on the development and commercialization of novel immunotherapy products. Unum’s vision is to provide a single cell therapy that can augment the activity of multiple antibodies to treat many different cancers.

I’ll provide a final opinion when we learn more details such as pricing and valuation assumptions.

Company

Cambridge, MA,-based Unum was founded in 2014. The company has developed an antibody-coupled T-cell receptor (ACTR) platform that causes an individual’s cytotoxic T-lymphocytes (CTLs) to kill tumor cells when combined with tumor-specific antibodies.

Management is headed by CEO Charles Wilson who also founded the company. Prior to Unum, Wilson was the Vice President, Global Head of Strategic Alliances for Novartis (NVS) from 2008-2014 and CTO/Vice President Alliance Management of Archemix from 2001-2008.

The firm’s lead program (based on ACTR technology) is in Phase I clinical testing to assess the safety and efficacy of the product in certain forms of leukemia and lymphoma. Unum’s technology also has the potential to treat many additional types of cancers.

Unum has a number of investors, including Square 1 Bank, New Leaf Venture Partners, Atlas Venture, and F-Prime Capital Partners.

Technology

Unum’s goal is to transform cancer treatment through the application of the ACTR platform in a wide range of hematologic and solid tumor cancers. Unum has developed an antibody-coupled T-cell receptor (ACTR platform), a universal, engineered cell therapy intended to be used in combination with a wide range of tumor-specific antibodies to target different tumor types.

Unum’s product candidates are comprised of ACTR T-cells co-administered with approved/commercially available antibodies or antibodies in preclinical or clinical development. According to the S-1 statement, ACTR is a chimeric protein which combines components from proteins normally found on both T-cells and natural killer cells, two types of human immune cells.

The company desires to use the ACTR platform to transform cancer treatment and improve upon current cell therapies.

(Source: Unum Therapeutics)

Unum’s main products include ACTR087 and ACTR707. ACTR087 is currently in an ongoing Phase I clinical trial to treat adult patients with relapsed or refractory non-Hodgkin lymphoma (r/r NHL). The therapy has demonstrated a favorable tolerability profile at the first dose level and anti-tumor activity. ACTR087 is advancing toward testing in an expanded patient cohort using an optimized dose to support potential registration trials.

Two additional product candidates in clinical testing include a Phase I clinical trial of ACTR707, a modified ACTR construct used in combination with rituximab in adult patients with r/r NHL and a Phase I clinical trial of ACTR087 used in combination with the novel antibody SEA-BCMA in adult patients with r/r multiple myeloma.

Unum also expects to file an investigational new drug application in 2018 for ACTR707 used in combination with trastuzumab, an FDA-approved antibody, to treat patients with solid tumor cancers. Unum plans to leverage the ACTR for other product candidates in the future for different hematologic and solid tumor cancers.

The company expects to secure commercial manufacturing capacity using one or more CMOs or by establishing its own commercial manufacturing good manufacturing practices facility.

Market

According to a 2014 market research report by GBI Research, the value of the NHL (Non-Hodgkin Lymphoma Therapeutics) market is projected to reach $9.2 billion by 2020 from $5.6 billion in 2013, representing a CAGR of 7.4%.

The main factors driving market growth are the expected launch of promising drugs such as novel small molecule inhibitors and next-generation monoclonal antibodies and the continued use of the current blockbuster Rituxan/Mabthera.

Additional driving factors include the extension of indications of several already marketed drugs such as Revlimid for DLBCL, Velcade for MCL, and Adcetris for CD30 T-cell lymphoma.

Major developed markets include the US, the UK, France, Germany, Italy, Spain, Japan and Canada.

Competition

Major competitive vendors that are developing advanced T-cell therapies and other types of related oncology therapies include:

• Roche (OTCQX:RHHBY)
• Celgene (CELG)
• Millennium Pharmaceuticals
• Seattle Genetics (SGEN)
• Kite Pharma (KITE)
• Juno Therapeutics (JUNO)
• Novartis AG
• bluebird bio (BLUE)
• Adaptimmune Therapeutics (ADAP)
• NantKwest (NK)
• Amgen (AMGN)
• Genmab (OTCPK:GNMSF)
• Cellectis (CLLS)

Management of the company believes that Unum has a competitive advantage through its ACTR platform and scientific expertise. The company has designed a process using a closed automated system to support clinical development plans and has assigned significant resources to optimize process development.

Financials

Unum’s recent financial results can be summarized as follows:

• Increasing collaboration revenue
• Increased operating losses
• Growing cash used in operations

Below are the company’s operational results for the past three years (audited GAAP):

(Source: S-1 statement)

Revenue ($)

• 2017: $8.4 million, 32% increase vs. prior
• 2016: $6.4 million, 113% increase vs. prior
• 2015: $3.0 million

Operating Loss ($)

• 2017: $26.2 million loss
• 2016: $19.1 million loss
• 2015: $6.6 million loss

Cash Flow used in Operations ($)

• 2017: $25.8 million cash used in operations
• 2016: $30.4 million cash used in operations
• 2015: $17.7 million cash used in operations

As of December 31, 2017, the company had $28.3 million in cash and $20.8 million in total liabilities.

IPO Details

Unum intends to raise $86.25 million in gross proceeds from an IPO of its common stock.

There is as yet no expression of interest for existing shareholders to buy into the IPO, which is typical of clinical stage biopharma firms seeking to go public in the current market.

Management says it will use the net proceeds from the IPO as follows:

We intend to use the net proceeds from this offering, together with our existing cash, cash equivalents, and marketable securities, to advance ACTR087 used in combination with rituximab for adult patients with r/r B cell non-Hodgkin lymphoma through the completion of our ongoing Phase I clinical trial; to fund a Phase II clinical trial of ACTR087 used in combination with rituximab for adult patients with r/r non-Hodgkin lymphoma who received prior CD19 CAR-T therapy; to advance ACTR707 used in combination with rituximab for adult patients with r/r B cell non-Hodgkin lymphoma through the completion of our Phase I clinical trial; to advance ACTR707 used in combination with trastuzumab through submission of an IND and to fund our Phase I clinical trial for this product candidate.

Management’s presentation of the company roadshow is not currently available.

Listed bookrunners of the IPO are Morgan Stanley, Wedbush Pacgrow, and Cowen.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Comments

[Adam May]

Thanks for the write up! Glad to see Unum already making its way to SA.

News broke (quite possibly after this was submitted for publication) that Unum has had some previously undisclosed patient deaths in the higher dose cohorts for its lead candidate. That will definitely be something to watch out for. Still, I am really excited about the potential of this technology. Combining the adaptability of the CD16 specific NK receptor with the stimulatory domains and cytotoxicity of CD8+ T cells is a brilliant approach. Hoping their pipeline rapidly expands outside of the CD19 space, which is ridiculously crowded.

Thanks again to the author, this is going to be a really fun company to follow!