12-Nov-2020: Taylor Collison: Immutep (IMM): TACTI-002 update at SITC
Analyst: Dr DENNIS HULME, dhulme@taylorcollison.com.au, +612 9377 1500, www.taylorcollison.com.au
Our View
IMM presented initial data from new TACTI-002 cohorts at SITC this week. On the positive side of the ledger, the continued high overall response rate (ORR) to efti/Keytruda combo therapy in the new head and neck cancer cohort (Part C) provides a very strong basis for a potentially pivotal randomised study in this indication. On the other hand, the ORR in the new cohort of first line lung cancer patients (Part A) was less than half that previously reported for Stage 1; subjects in the new cohort were older and in poorer health, which may have contributed to the lower ORR. When combined with the very high response rate in Stage 1 the ORR in Part A as a whole is ~50% higher than that previously reported for Keytruda monotherapy. The ORR in PD1/L1 refractory NSCLC was 4.4% in a challenging population. Overall, we believe the high response rates for efti combo therapy in the TACTI-002, TACTI-mel and INSIGHT trials should be sufficient to attract a substantial licence deal for efti. We expect the company to prepare for a randomised Phase IIb in head and neck cancer that aims to conclusively demonstrate that efti increases response rates when combined with checkpoint inhibitors such as Keytruda. IMM’s value is further supported by Phase II LAG-3 programs out-licensed to Novartis and GSK. We increase our valuation to $447m (vs $414m), $0.66/sh fully diluted (vs $0.63/sh) or $0.92/sh undiluted, based on the improved prospects in head and neck cancer.
Key Points
- TACTI-002 Part C: Positive new data in 2 nd line head and neck cancer – Initial data were reported for the first 10 subjects in the second cohort of patients (Stage 2) with squamous cell carcinoma of the head and neck (HNSCC) – 3 were not evaluable for tumour responses. There were 3 responders among the 7 evaluable subjects, including one complete response. The 43% ORR among evaluable patients was in line with the 44% (7/16) ORR among evaluable subjects in Stage 1. On an intention to treat (ITT) basis, including the nonevaluable subjects, the ORR was 36% for the 2 cohorts combined (including 3 complete responses), which is more than double the ORR of 14-18% reported for Keytruda monotherapy in comparable patient populations in the Keynote-012 and Keynote-040 studies. In our view these data are very positive and justify progressing to a randomised study of efti/ checkpoint inhibitor combo therapy in HNSCC patients. Stage 2 has recruited 17 of the target of 19 subjects. We expect data on the final 7 subjects in Part C to be reported in H121.
- TACTI-002 Part A: First line non small cell lung cancer (NSCLC) – IMM also reported initial results from the 19 subjects in second cohort of first line NSCLC patients (Part A). There were 4 tumour responses among the 16 evaluable subjects, including a complete response in a patient with 0% PD-L1 expression. The 25% (4/16) ORR among evaluable subjects is half the 53% (9/17) ORR reported for Stage 1. IMM noted that the subjects in Stage 2 were on average 9 years older (74 vs 65) and were in poorer health (84% vs 29% ECOG 1) than those in Stage 1. The 36% ORR for both cohorts combined on an ITT basis (including 2 complete responses) and 39% among evaluable subjects was ~50% higher than the 25% ORR to Keytruda monotherapy in Keynote-001. Responses were reported from all PD-L1 subgroups: notably, the ORR in low PD-L1 expressing patients (PD-L1<50%) was 31.6%, which is 68% higher than the 18.8% in comparable patients receiving Keytruda alone in Keynote-001. The efti/Keytruda combo was well tolerated with no new safety signals.
- Revised valuation assumptions: We increase the probability of approval of efti in HNSCC to 20% (vs 15%), bring forward a potential launch in HNSCC to 2026 and delay other efti launches to 2028. Our valuation increases to $447m.
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