Y-mAbs Therapeutics: Steady, Small Steps Targeting Rare Cancers

May 30, 2022 6:16 AM ETY-mAbs Therapeutics, Inc. (YMAB)2 Comments

Summary

  • YMAB has one approved drug and another coming up in an ultra rare disease.
  • Approval looks likely given the lower threshold for such diseases, and strong data supporting the application.
  • The markets are small, but there's not a lot of competition.
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I am wondering why Y-mAbs (NASDAQ:YMAB) has not hired someone to keep their website updated. The way it says “2021 BLA submission” for omburtamab in pediatric ​​CNS/Leptomeningeal Metastases from Neuroblastoma makes it appear that this is a milestone, not something that has happened. This suspicion is confirmed by the two preclinical assets, one of which says “IND 2021” while the other says “IND filed in 2021.” That means the former is a milestone for 2021 - which the website hasn’t updated. This is confirmed by looking at the latest Corporate Presentation, which says “BLA resubmitted Q1 2022, MAA submitted Q2 2021.” Clearly, that website hasn’t been updated, which makes it difficult for people to understand the company.

The molecule omburtamab received a Refuse-To-File letter from the FDA in October 2020 “citing the need for more information on the manufacturing and clinical modules.” This required the company to provide supplementary data on tumor response from the first 24 patients in a phase 2 trial. However, the entire process was delayed multiple times, with promises that did not materialize, and so on, until the submission finally took place in Q1 2022, almost 15 months later.

My last coverage of YMAB is from December 2020, since which time the stock is down 80% despite getting an approval in that year. This was for DANYELZA (naxitamab), which was approved for Relapsed/Refractory High-Risk Neuroblastoma (Pediatric/Adult). This is a small market with only 300 patients in the US. This product had Q1 net sales of $10.5 million. DANYELZA generated revenues of $32.9 million in its first year, that is, in 2021. So this is a small but steady revenue stream. There was a 9% sequential increase in net revenues for DANYELZA since approval.

The second candidate is omburtamab, which has a Rare Pediatric Disease Designation or RPDD, which sells for ~$100mn if the drug gets approved. YMAB has 3 such RPDD designations; besides omburtamab, the other two are GD2-GD3 Vaccine and Lu-omburtamab-DTPA targeting medulloblastoma. They also have a preclinical stage asset called SADA, which uses liquid radiation to treat cancers. An IND was filed in December.

The total addressable market for the various indications incrementally add up to a decent enough number. Here’s a table from the company:

Indication

Total Incidence per Year (US)

Addressable Patient Population per Year (US)

Neuroblastoma – 2 nd Line

300

300

Neuroblastoma – Front Line

800

450

Osteosarcoma – 2 nd Line

450

200

This is for DANYELZA. The total adds up to 950 patients. As for omburtamab, here’s the data:

Indication

Total Incidence per Year (US)

Addressable Patient Population per Year (US)

Neuroblastoma Metastatic to the Central Nervous System (CNS/LM from NB)

80

80

Diffuse Intrinsic Pontine Glioma (DIPG)

300

300

Desmoplastic Small Round Cell Tumors (DSRCT)

100

100

This adds up to another 480 patients. Now, if YMAB is making $40mn for an indication with 300 patients, then, for the entire approximately 1500 patient market, it can pull in $200mn per year. That’s a rough back-of-the-envelope calculation which gives me an idea of valuation.

Current frontline treatment regimen in pediatric neuroblastoma is Dinutuximab. This is given in a 10-20 hour infusion four times a week, while naxitamab is given in a 30-60 minute infusion 3 times a week. This is a rapid infusion outpatient treatment that causes less pain, requires fewer hospital days and higher level of compliance. Dinutuximab also needs ASCT as consolidation therapy, which naxitamab does not require. It also needs IL-2 as maintenance therapy which, again, naxitamab does not need. These are some of the differentiations between the two molecules.

As for omburtamab, in trials that supported the BLA, the molecule demonstrated a median OS of approximately 51 months, compared to historical mOS of ~6-9 months. There are no FDA-approved therapies for this indication, so approval seems more likely than otherwise. However, the patient population is really small. There is a possibility for significant label expansion because B7-H3 is widely expressed in various cancers, however that will take the molecule from the safety of orphan diseases - where the threshold for approval is somewhat flexible - to major cancers, where it is not.

I want to share an interesting anecdote about the company:

Pediatric cancer is a personal focus for Y-mAbs founder Thomas Gad, whose daughter was diagnosed with high-risk neuroblastoma at age 2, according to the company’s S-1. She was treated with the mouse version of naxitamab at the time, but later relapsed and began taking omburtamab about 11 years ago. Since then, she has been disease-free.

Financials

YMAB has a market cap of $480mn and a cash balance of $156.7 million. The company earned $10.5mn in the first quarter. They have guided for $40-$50mn in DANYELZA sales for 2022. Research and development expenses were $22.9 million for the three months ended March 31, 2022, while selling, general, and administrative expenses were $13.4 million. At that rate, and taking into account the recurring revenue, the company has a cash runway of 6-7 quarters.

The company recently lost its longtime CEO, Dr. Claus Møller, who stepped down in late April. From the 8-K:

On April 27, 2022, Y-mAbs Therapeutics Inc. (the “Company”), announced certain executive management changes. Effective April 22, 2022, Dr. Claus Moller stepped down from his positions as Chief Executive Officer and as a member of the Company’s Board of Directors. There were no disagreements with the Company expressed by Dr. Møller on any matter relating the Company’s operations, policies or practices.

In China, the company has partnered with SciClone Pharmaceuticals for DANYELZA and omburtamab. There is a regulatory milestone this summer in China following from a possible regulatory approval.

Bottomline

YMAB is a small company with deep focus on rare cancers, an approved drug, and one more in the offing. I am not sure I would invest in the company given the small market, however this Danish company is doing medicine in the right way, one small step at a time.

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