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Four asx cancer stocks under the microscope

James Dunn looks at biotech companies attempting to address some of the biggest unmet medical needs in the world.

Australian biotech companies are heavily involved in trying to address some of the biggest unmet medical needs in the world – with the various forms of cancer being at the forefront of research and drug development.

The various approaches to cancer and different sets of intellectual property – and the effects seen so far in therapeutic development programs – is one of the most fascinating sectors of the Australian life sciences industry; and although the path through clinical trials to actual use in patients is long and fraught with danger, it is also an area of great interest to investors who understand biotech.

We put four Aussie key cancer stocks under the microscope. Bear in mind that these are high risk, high reward plays, so consider any potential investment and portfolio sizing carefully.


1. Kazia Therapeutics (KZA: ASX)

Market capitalisation: $30 million

Formerly known as Novogen, Kazia Therapeutics has two major clinical programs, from which it is expecting a swathe of data to emerge this year.

Kazia’s lead program, GDC-0084, is a targeted drug candidate that KZA has licensed from Genentech, and is developing as a potential treatment for glioblastoma, the most common and most aggressive form of primary brain cancer. Despite all efforts, there have been few significant advances in treatment over the last decade, and the prognosis remains poor. The five-year survival rate is about 3%, compared with almost 90% for patients with breast cancer. It is estimated that approximately two out of every 100,000 people will develop GBM each year.

In 2018, the US Food & Drug Administration (FDA) granted GDC-0084 Orphan Drug designation for glioblastoma: the objective of the Orphan Drug program is to provide incentive to companies to bring medicines for a small population to the market. GDC-0084 entered a Phase II clinical trial in March 2018: initial readout – notifying the market of the trial data – of the safety data is expected in the second quarter of 2019, with preliminary efficacy data readout expected in the fourth quarter.

GDC-0084 works by “switching off” a critical control mechanism that drives many types of cancer, the phosphoinositide-3-kinase (PI3K) signalling pathway. Aberrations of this pathway are implicated in many types of cancer: researchers have responded by focusing on drugs that can inhibit this pathway as an approach to treating cancer. PI3K inhibitors is a well-validated class of drugs, and there is one drug, Idelalisib, that is approved for use in certain kinds of leukaemia and lymphoma; but Kazia’s point of differentiation is that GDC-0084 is the only PI3K inhibitor that has been shown to be able to cross the blood-brain barrier drugs from getting into the brain: if a drug cannot get into the brain, it is useless as a treatment for brain cancer.

Kazia says the only existing treatment for GBM – chemotherapy with Temozolomide, the only FDA-approved drug for newly-diagnosed patients – provides no benefit to two-thirds of patients. It says bringing an alternative treatment to market represents a potential US$1.5 billion commercial opportunity.

Kazia’s second program is its wholly owned Cantrixil, a first-in-class drug candidate that targets the entire spectrum of cancer cells, including tumour-initiating cells thought to cause cancer recurrence. Research done by Yale University has provided pre-clinical evidence that Cantrixil is active against both differentiated cancer cells and tumour-initiating cells (sometimes referred to as ‘cancer stem cells’). The latter are thought to be an important component of chemotherapy resistance and disease recurrence in diseases such as ovarian cancer, and thus Cantrixil has potential to offer benefit to the approximately three-quarters of ovarian cancer patients who are not adequately managed by conventional chemotherapy treatments.

Yale’s researchers identified and isolated the ovarian cancer stem cells that are responsible for tumour formation and chemo-resistance: that is, the cells responsible for starting ovarian cancer, its spread and its eventual recurrence after treatment. Yale has the world’s largest “library” of ovarian cancer stem cells collected from patients who have died of the condition: Cantrixil is the only product Yale has seen that can knock out these cancer stem cells – in the company’s words, the “first drug to show uniformly high potency against the Yale library of ovarian cancer stem cells collected from tumours that had stopped responding to chemotherapy.” Largely on the basis of this work, the FDA granted Cantrixil orphan drug designation for ovarian cancer in April 2015.

Cantrixil is envisaged as providing a new treatment option for women with later-stage ovarian cancer, who have received limited benefit from existing chemotherapy. The survival rate for this disease is poor because of the high rate of relapse after standard-of-care treatment and the late stage at which the disease tends to be diagnosed. When ovarian cancer relapses, the disease is often not responsive to standard chemotherapy agents: Cantrixil is potentially effective against the chemotherapy-resistant tumour-initiating cells that are thought to be responsible for disease relapse.

Cantrixil is currently undergoing a Phase I clinical trial in Australia and the US: initial data was presented in June 2018 and the study is ongoing. The safety and dosing study was completed last year: readout of the efficacy data is expected in the third quarter of 2019.


2. Immutep (IMM: ASX)

Market capitalisation: $118 million

Immutep focuses on immuno-oncology, which is the field of developing immune-based therapies that enable the body’s immune system to selectively recognise and attack cancer cells. The company is the former Prima BioMed, an immuno-therapeutics developer that in 2015 reported what looked to be promising results for its lead product, the CVac cancer vaccine – which had come out of research programs at Melbourne’s Austin Hospital – in an ovarian cancer trial.

However, the company changed focus after buying French biotech Immutep in late 2014 for US$25 million, and in May 2016 it sold the CVac assets to another company, Sydys, and shifted its strategic priority to the LAG-3 molecule, which came with the Immutep acquisition. The founder of Immutep, French immunologist Frédéric Triebel, discovered LAG-3 (lymphocyte activation gene 3) in 1990, while working at the Institut Gustave Roussy in France: Triebel is now chief medical officer and chief scientific officer of Immutep.

LAG-3 is an immune control mechanism that is considered one of the most promising targets in immuno-oncology. It is a protein molecule that can identify cancer cells to regulate immune responses, allowing patients to fight the disease using their own cells.

Immutep’s current lead product candidate from the LAG-3 protein stable is eftilagimod alpha (Efti, or IMP321). Efti is currently in a Phase 2b clinical trial as a chemo-immunotherapy for metastatic breast cancer: in this trial, Efti is being used in combination with a chemotherapy drug, paclitaxel, with the combination aimed at boosting the immune response against tumour cells compared to chemotherapy alone. This trial is pivotal: it is the most advanced clinical trial for a prospective immunotherapy drug related to LAG-3, and could address an unmet need in the large breast cancer treatment market, valued at US$17.2 billion ($22 billion), by 2021.

Efti is also involved in a Phase I combination therapy trial (TACTI-mel) in metastatic melanoma, evaluating the combination of Efti with MSD’s drug KEYTRUDA against metastatic melanoma; and a Phase II clinical trial (TACTI-002) to evaluate a combination of Efti with KEYTRUDA in treating several different solid tumours.

The company is also planning a Phase I clinical trial (INSIGHT-004) to evaluate a combination of efti with avelumab, a therapy jointly developed by EMD Serono and Pfizer, which is approved to treat metastatic Merkel cell carcinoma (MCC), a type of aggressive skin cancer, and urothelial carcinoma, a type of cancer of the bladder or urinary tract.

Immutep is at the forefront of the approach of harnessing the immune system’s abilities as the future frontier of cancer treatment, with a particular focus on combination therapies. Major global pharmaceutical companies are backing LAG-3 as a meaningful therapeutic target, leaving IMM nicely positioned as the intellectual property owner.


3. Prescient Therapeutics (PTX : ASX)

Market capitalisation: $12 million

Melbourne-based Prescient Therapeutics has two drug candidates in testing, targeting different cancers through two different pathways. The range of cancers where Prescient’s drug candidates could be effective have become resistant to front-line chemotherapy, meaning the market is very keen to look at new approaches.

PTX’s lead drug candidate, PTX-200, works to inhibit an important tumour survival pathway known as Akt, which plays a major role in the development of many cancers, including breast and ovarian cancer, as well as leukaemia. The Akt signalling pathway is a crucial regulator of normal cellular processes involved in cell growth, but aberrant activation of the pathway promotes the survival and proliferation of tumour cells in many human cancers. There are other drug candidates that inhibit the Akt pathway, but all have toxicity problems: PTX-200 has a unique mechanism of action that specifically inhibits the Akt pathway, while being comparatively safer.

PTX-200 is currently in a Phase Ib/2 trial evaluating it as a new therapy for relapse and refractory acute myeloid leukaemia (AML), being conducted at Florida's H. Lee Moffitt Cancer Center and the Yale Cancer Center at Yale University. AML is a type of blood cancer that affects the bone marrow and prevents a patient from producing normal blood cells: because it is more common in adults over 60, the prevalence of AML is outpacing population growth in ageing, developed economies. There has been very little innovation in treating AML in the last 40 years: Prescient says that after initial chemo-therapy, most patients relapse. In 2017, the FDA granted PTX-200 Orphan Drug designation in AML: the objective of the Orphan Drug program is to provide incentive to companies to bring medicines for a small population to the market.

PTX-200 is also in a Phase Ib/II study examining its action in breast cancer patients at the prestigious Montefiore Cancer Center in New York, and the Moffitt Center; lastly, it is undergoing a third trial at the Moffitt Center, a Phase Ib/II trial testing it in combination with the current standard of care in patients with recurrent or persistent platinum-resistant ovarian cancer.

While these trials are taking place, pharma giant Roche is testing its own Akt inhibitor, ipatasertib, against a different subset of breast cancer, metastatic triple negative disease. Prescient CEO Steven Yatomi-Clarke said in December that the Roche trial results have demonstrated three things that are very relevant to Prescient: first, the Akt pathway is activated in response to chemotherapy in breast cancer patients; second, Akt inhibitors enhance the killing of breast cancer cells; and third (and most significant) this Akt inhibition results in clinical benefit for breast cancer patients. Yatomi-Clarke – speaking as interim durability analysis of PTX-200 in breast cancer patients demonstrated no disease progression – reiterated Prescient’s conviction that PTX-200’s unique mechanism of action may show advantages over other Akt inhibitors.

Readouts of the AML trial and ovarian cancer trials are expected in the third quarter of 2019, followed by the readout of the breast cancer trial in the fourth quarter of 2019.

PTX's second novel drug candidate, PTX-100, is a first-in-class compound with the ability to block an important cancer growth enzyme known as geranylgeranyl transferase (GGT), which is a crucial part of the Ras pathway, which is implicated in many cancers. Prescient says that targeting Ras directly has proven elusive, but PTX-100 disrupts the Ras pathway downstream by preventing the activation of downstream molecular “switches” known as Rho, Ral and Rac, which are involved in cell growth and survival. Prescient says that Ras mutations are observed in one-third of all cancers, and successfully addressing this aberrant pathway represents a large unmet need in many cancers.

PTX-100 has been through a Phase I trial in advanced solid tumours (mostly gastro-intestinal cancers), conducted at Indiana and Penn Universities, in which it was well tolerated, and achieved stabilisation of the disease. Prescient is planning to re-enter the clinic with PTX-100.

PTX-100 has also shown great potential in haematology applications, because it appears to be able to block a mutation of the molecular switch RhoA, which is implicated in rare lymphomas – a group of related cancers that affect the lymphatic system, which forms part of the immune system. Prescient says PTX-100 “appears to be world’s most clinically advanced RhoA inhibitor in oncology, giving it a unique positioning in this area of high unmet need.” The data readout of the Phase Ib trial of PTX-100 against RhoA mutant cancers is scheduled for the first quarter of 2020.


4. Invion Limited (IVX : ASX)

Market capitalisation: $72 million

Our fourth company, Invion, takes a very different approach to cancer: its photo-dynamic therapy (PDT) technology Photosoft – derived from chlorophyll – is a ‘photo-sensitiser’ compound that can be introduced to a cancer cell and taken up by the cell, and then be activated using a particular wavelength of light to form oxygen free radicals, which kill the cell; and also, set up an immune response in the body.

Invion has exclusive commercialisation rights to Photosoft in Australia and New Zealand, granted to it in 2017 by the Cho Group, a Hong Kong-based group that has successfully commercialised a number of advanced technologies. Under its rights, Invion has changed the formulation of Photosoft slightly, and created a far more potent ingredient, called IVX-P02.

Invion’s research partner, the Hudson Institute of Medical Research (based at Monash University in Melbourne) found in laboratory tests that both Photosoft and IVX-P02 were substantially more effective at killing cancer cells than several other photo-sensitisers it tested – and that the IVX-P02 compound was about 15 times more efficient in killing cancer cells than Photosoft. Being more potent means that lower doses can be used to get the same effect, or an increased dose can get more effective cancer-cell mortality.

Laboratory testing of IVX-P02 has shown that it has significant ability to kill ovarian cancer cells: the cell death is not a random occurrence, but a consequence of the cytotoxicity created through the activation of IVX-P02. The Hudson Institute says IVX-P02 has the greatest cytotoxic effect after activation than any other sensitiser it tested – giving a “precise and effective execution of cancer cells.”

Animal testing, in mice with advanced ovarian cancer, has shown that the IVX-P02 compound clearly identifies the cancerous tumour tissue; it is selectively taken up by the tumour cells, and not by normal tissue; and accumulates in the tumour tissue.

Next up for Invion, over 2019 and 2020, is to take IVX-P02 into clinical trials, firstly against skin cancer and superficial basal cell cancer (BCC); then in comparison with the combination of the standard drug Metvix, and surgery, in BCC treatment; and then comparing IVX-P02 against the combination of Metvix and cryotherapy in treating actinic keratosis (AK), a very common condition that has the potential to progress to squamous cell carcinoma.

Invion hopes to create a new cancer treatment that can affect cancer types that have already become resistant to current treatments, such as chemotherapy, and as an alternative to surgery – and a treatment that is free of side-effects.

When the compound is taken up by the body, it has no toxicity, no effect on the cells – there are zero side-effects, unlike chemo-therapy or immune-suppressant therapy. The therapeutic effect is switched on when light at specific wavelengths is shone directly on the compound: only then does it become toxic specifically to the cancer cells. Neither the compound nor the light has any effect on the body on its own: the effect on the cancer cells comes from the light generating oxygen free radicals from the photo-sensitiser. Most importantly, PDT is a non-toxic approach to cancer treatment, and in that, it is a potential replacement to the current standard of care.

Photosoft/IVX-P02 also stimulates the body’s immune system to generate a positive immune response to the cancer. That could potentially help to control any recurrence of the disease. In combination with immune-treatment, it could help to protect the patient from the spread of cancer.

Invion hopes that the favourable side-effect profile will position Photosoft/IVX-P02 as an early-stage treatment that could be used in all cancers, before any other more invasive therapy such as chemotherapy or surgery.

About the Author
James Dunn , Switzer Group

James Dunn is an author at Switzer Report, freelance finance journalist and media consultant. James was founding editor of Shares magazine, and formerly, the personal investment editor at The Australian. His first book, Share Investing for Dummies, was published by John Wiley & Co. in September 2002: a second edition was published in March 2007, and a third edition was published in April 2011. There have also been two editions of the mini-version, Getting Started in Shares for Dummies. James is also a regular finance commentator on Australian radio and television.