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What's Next For ICT-107?

|Includes: ImmunoCellular Therapeutics, Ltd. (IMUC)

Unfortunately, results from the ICT-107 Phase 2 study were disappointing, but the program is probably not dead just yet. IMUC management alluded that the statistically significant improvement in progression free survival (NYSE:PFS) of two months may not be enough to receive FDA approval but is enough to initiate a Phase 3 trial, despite a non-significant improvement in overall survival (OS) of two months.

We can look at Avastin to get an idea of what a Phase 3 study with ICT-107 might look like. The AVAglio trial showed that Avastin improved median PFS by 4.1 months but ultimately had no OS benefit. The AVAglio study enrolled over 900 patients at more than 130 centers all around the world and took about three years to complete.

It is difficult to say for sure without consulting a statistician, but investors can assume that a Phase 3 study with ICT-107 will have to enroll a similar number of patients as the AVAglio trial - maybe a little less. Due to manufacturing, the Phase 3 study will likely be restricted to North America and Europe and as a result, will probably have no more than 100 trial sites. With fewer centers and an HLA restriction, the trial will likely take more than three years to conduct, assuming it will take longer to recruit the same number of patients as the AVAglio study. IMUC's CEO mentioned during the recent conference call that the cost of a trial is about $100,000 per patient, so a Phase 3 trial with ICT-107 could cost as much as $90 million.

A subgroup analysis of the Phase 2 results might identify a specific population of patients who respond better to ICT-107, and thereby, reduce the number patients required for a Phase 3 study. Assuming that a subgroup of patients can actually be identified, a Phase 3 trial would be cheaper but not necessarily faster to complete. Also, the eligible population of newly diagnosed glioblastoma (GBM) patients that can be treated with ICT-107 is already reduced by the HLA-restriction. Decreasing the patient population even further might limit the commercial viability of ICT-107 given its higher manufacturing costs.

IMUC currently has about $25 million in cash, so the company will have to raise additional capital or find a strategic partner to fund a Phase 3 trial with ICT-107. It's hard to predict whether IMUC will be able to attract a strategic partner or not. There are a few companies, such as Novartis and Celgene, that are developing autologous cell therapies, but with a relatively small survival benefit, they might not want to risk so much money to fund a trial. Alternatively, IMUC can try to raise money on the public markets. Again, it's difficult to speculate on the risk tolerance of investors, but one can assume that further dilution will put downward pressure on the share price. If the market capitalization drops much lower, there is a risk of getting delisted from the NYSE MKT.

Assuming management can find the cash to fund a Phase 3 trial, the study probably won't start until 2015 (as mentioned during the recent conference call). If so, results won't be expected until around 2019. The company has two ongoing early-stage clinical programs (ICT-121 and ICT-140), which probably won't produce results until 2015 or so. These programs are also based on the same dendritic cell platform as ICT-107, so investors should be somewhat skeptical about getting positive results.

Despite the setbacks, there is still some hope for the ICT-107 program. GBM is such a terrible disease that Avastin received a conditional approval to treat recurrent patients without any survival data. However, Avastin will unlikely get an FDA approval to treat newly diagnosed GBM patients with only an improvement in PFS. If (and it's still a big if) ICT-107 can eventually show a statistically significant OS improvement even if only for two months, it should eventually get approved; unfortunately, an approval will take a lot more time and a lot more money.