Stifel -Intrexon Update – Second Cohort Enrollment Completed for Ziopharm’s Ad-RTS-IL-12 Study in GBM
June 28, 2016
XON – NYSE
Target Price — $57.00
Intrexon Update – Second Cohort Enrollment Completed for Ziopharm’s Ad-RTS-IL-12 Study in GBM
Yesterday afternoon, Ziopharm announced updated enrollment in its ongoing Phase I trial of Ad-RTS-IL-12 + veledimex in glioblastoma – enrollment in the second cohort was completed and the third cohort is now open to patients. This news follows last month’s preliminary data, which showed the company’s gene therapy candidate was safe and showed signs of activity. Given historical controls, the interim results showing 10 of 11 patients are still alive at median of 6.2 months is interesting, and, pending final data, potentially compelling. In addition, in light of Amgen’s recently approved T-VEC and the expectation that many GBM patients undergo surgery, we believe Ziopharm’s Ad-RTS-IL-12 approach could be medically tractable, if efficacy is eventually compelling.
Ad-RTS-IL-12 is another powerful IO approach. Much of oncology is currently
focused on enticing the patient’s immune system to help destroy tumors. This goal
is probably much less far fetched than it once seemed as it’s now clear that most
tumors contain the remains of immune responses. It is thought that these
anti-tumor immune responses arose to fight these semi-foreign growths (tumors),
but were shut off by what is called the tumor micro-environment (thus allowing the
tumor to grow). These ineffective immune cells that recognized the tumor but could
not destroy it are called tumor infiltrating lymphocytes (TILs). Attempts to get TILs
to finish their job have focused on checkpoint immunotherapies such as Ipilimumab
(anti-CTLA-4) and Nivolumab (anti-PD-1) that block the activity of the
immunosuppressive tumor microenvironment and thereby enhance the activity of
the anti-tumor TILs.
Ad-RTS-IL-12 + Veledimex. Ziopharm has taken an alternate approach to this
problem and is attempting to activate TILs through expression of IL-12, a
pro-inflammatory cytokine that activates the TIL’s and probably other T-cells
resulting in stronger anti-tumor responses. However, a major problem with
stimulatory cytokines, such as IL-12, is their significant tendency to cause side
effects – so administering them systemically is problematic (the NCI has attempted
this administration in humans and has not adopted a mode of administration using
Intrexon’s technology, we believe). Ziopharm is approaching this problem using
one of Intrexon’s most well-known tools – called the RheoSwitch. The RheoSwitch
itself is a two part gene regulatory element controlled by the orally available drug
veledimex. When veledimex is administered orally, tumors that have been injected
with Ad-RTS-IL-12 start to express IL-12. The data here are not fully disclosed, but
Ziopharm management has indicated that IL-12 can be measured systemically and
that IL-12 side effects are reversibly observed after induction. Most importantly,
when veledimex is withdrawn, the expression of IL-12 slows and then stops over
the course of several hours. (continued...)
It's probably still early days, but the goal of getting just enough IL-12 expression
and concomitant TIL activation to fight the tumor, but not be too toxic for the
patient seems reasonable.
Ad-RTS-IL-12 in comparison Amgen’s Imlygic. Imlygic (T-VEC) seems an
analogous therapeutic and takes a dual approach blocking the cellular protein
ICP47 (allowing antigen to be presented) in addition to stimulating immune cells to
attack tumor cells. In Imlygic, Amgen has altered the cold sore virus, made
several genetic modifications, including increasing its selectivity for cancer cells,
to generate a therapeutic that is directly injected into the tumor. Subsequently,
macrophages are stimulated to secrete the GM-CSF cytokine and an anti-tumor
response is invoked. When injected into melanoma, the drug has shown a 16.3%
durable response rate in patients. Given that Imlygic is delivered via injection,
Ziopharm’s approach of directly injecting the drug into tumors seems more
medically acceptable. In addition, given the clear activity of Imlygic and possibility
that Imlygic expresses the less powerful GM-CSF cytokine than IL-12 (used in
Ad-RTS-IL-12), we find the Ziopharm program increasingly interesting.
Interim Ad-RTS-hIL-12 Phase I results. In May, Ziopharm announced interim
data from its ongoing single-arm, dose escalation, recurrent GBM study. In cohort
one, 86% of patients remain alive with a median follow up time of 6.8 months
(n=7). Additionally, in the May press release, the company noted that 91% of all
11 patients were still alive with a median follow up time of 6.2 months (cohort two
was not fully enrolled yet). We note all patients enrolled had high-grade, recurrent
glioma and nine of these 11 patients had previously failed salvage therapy.
Furthermore, Ziopharm notes that mOS for patients these settings is
approximately 6-7 months and 3-5 months, respectively. Given these historical
controls, we find the preliminary data interesting and potentially compelling.
Ziopharm expects to present updated data later this year.
Glioblastoma treatment paradigm. Treatment for GBM upon initial diagnosis
typically involves surgery, radiation, and chemotherapy. Maximum tumor resection
is considered the best option for those where surgery is possible/appropriate. We
note carmustine wafers are approved as an adjunct to surgery/insert into the
resection. In newly diagnosed GBM patients, the drug’s label lists a 12.9 month
mOS for those on carmustine + radiation arm versus an 11.6 month mOS for
patients on the placebo + radiation arm. In recurrent GBM patients, the drug’s
label lists a 6.5 month mOS for those on carmustine + radiation arm compared to
a 4.6 month mOS for patients on placebo + radiation arm.
Temodar, an alkylating agent, is also approved for newly diagnosed glioblastoma
patients and to be administered with radiation and subsequently as maintenance
treatment. Temodar’s label lists a median OS for radiation therapy + Temodar of
14.6 months versus 12.1 months on radiation therapy alone. Lomustine is another
alkylating agent that is approved for patients with brain tumors. However this
chemotherapy is approved only in those who have already undergone surgery
and/or radiation therapy. Finally, we note Avastin is approved in glioblastoma as a
single agent for adult patients with progressive disease following prior therapy.
The drug’s label lists a 19.6% ORR and a 3.9 month median duration of response.
Target Price Methodology/Risks
We value the company via a sum-of-the-parts approach where some of the pieces
of the company are valued via formal methods (principally DCF) and other, earlier
stage parts of the company are valued principally based on competitor valuations.
Overall, this approach results in a calculated market capitalization of $6.685 billion.
Based on a current share count of 116.861 million, we arrive at a 12-month price
target of $57.
RBC after the bell- Flagging it: We're basically near/at "zero pipeline" value for biotech now - Group trading at 12–14x on 2017E, well below the S&P500
Flagging it: We're basically near/at "zero pipeline" value for biotech now
Group trading at 12–14x on 2017E, well below the S&P500 – see updated chart
June 27, 2016
RBC Capital Markets, LLC
Michael J. Yee
Keeping one eye on fundamentals and compelling valuation (the other on short-term uncertainty)
Realizing it's pretty tough out there as global equity markets continue to correct from Brexit, we'd be remiss to not keep our "fundamental" hat on for longer-term investors who understand biotech should likely continue on, and while there will be some relative "risk off" period and investment uncertainties in the short term (currency impact, EU regulatory/pricing questions, if any), we think these shouldn't be too bad and on the whole biotech should be OK and fundamentals should be intact. We have seen global crises and economic uncertainties of a wide degree of seriousness over the last decade (2008 financial crisis, Greek debt crisis, US debt downgrade, Obamacare uncertainty, etc.) and generally those were longer-term opportunities for investors after the dust settled. We didn't say this was the bottom—and we are at key technical support levels on the IBB this week—but we are at least flagging what's happening on a valuation basis and that historically this is an important point to mark.
In this pullback, we've received more and more calls from investors looking at these opportunities right now and we've said in the past that buying biotech when 1) it's trading below the S&P500 multiple and 2) it's trading near a "zero pipeline" value has generally been a winning solution over 12–18 months. The longest periods when these criteria existed were about Jan 2010–June 2011 post financial crisis and when Obamacare was being implemented and it wasn't clear how HC would be impacted and investors didn't want to ow
Stunning this guy has lived four times the 3 months expected and is skiing a yr later wow
Griffin knows the company better than anyone. Kirk access through former Griffin covering analyst CB
The clinical data is quite encouraging particularly when factoring in that the first cohort included patients with a poor prognosis (life expectancies in the range of 3-5 months for three patients and 6-7 months for the others). Given the very short life expectancy for these very sick patients, we should get even stronger signs of survival as early as this year. In our view, the results to date suggest a likely survival benefit. The second cohort has not been followed long enough to yield meaningful survival data, but importantly one patient was successfully maintained on veledimex by reducing the dose from 40 to 20 mg/m2, thus demonstrating both the flexibility and safety of the IL-12 dosing regimen.
The existing IL-12 trial data will mature quickly given the very short life expectancy for this very sick group of patients. In our view, a survival benefit would allow ZIOP to proceed directly to a pivotal registration trial by early 2017 and also qualify the gene therapy candidate for accelerated approval. Important follow up data that could show a significant survival benefit versus historical controls may be presented as soon as the annual meeting of the Society for Neuro-Oncology, November 17-20 (http://www.soc-neuro-onc.org). This would also represent a huge de-risking event for the IL-12 gene therapy candidate that could have potential in a broad range of tumor types. We also expect the company to start an IL-12 combination trial with a checkpoint inhibitor in glioblastoma patients with a major I/O player sometime soon. This could also be accompanied by a partnership as the PD-1 space is hyper competitive and the Big Boys are looking to differentiate their specific PD-1s.
ZIOP is a BUY under 12 with a TARGET PRICE of 18
MTSL-ZIOP – Passes BBB, SAE's/Severe Tox rapidly reversed on discontinuation. Expect partner with PD-1 with Big players looking to differentiate in hyper competitive space. Buy under $12 for $18 target.
ZIOP – Presents Encouraging IL-12 Glioma Data at ASCO
ZIOP reported encouraging IL-12 data at ASCO showing both good survival duration (10.7 months) and safety in very sick brain cancer patients who have exhausted all available treatment options. Two cohorts of patients have been treated thus far. Seven patients (ages 32 – 58 years) with advanced brain cancer (10 with glioblastoma and 1 with Grade III glioma) received 2 x 1011 virus particles injected intra-tumorally and veledimex (20 mg/m2) orally for 14 days. The second cohort’s four patients (ages 37 –55 years) received a 40 mg/m2 of activator ligand. All patients in the first cohort and three of the four in the second suffered multiple recurrences prior to enrollment. The seven patients in the first group had 2.7 prior lines of therapy (three with temozolomide and bevacizumab) and six are still alive with a median survival of 6.8 months (range: 5.2 – 10.7 months). Patients in the latest group had 2 prior lines of therapy and all are alive (range: 0.8 – 3 months). Both the efficacy and safety highlighted in the abstracts were confirmed at ASCO. In our view, ZIOP’s IL-12 gene therapy candidate has the potential to be the first gene therapy approved for a solid tumor.
Important safety data demonstrated that veledimex passes the blood brain barrier and that serious and severe toxicities are rapidly reversed upon its discontinuation. The most common adverse events (mostly Grade 1 & 2) were headache, fever, nausea/vomiting, decreased white blood cell and platelet counts, and elevated liver enzymes. Two subjects in the first cohort had these adverse events, but with greater severity, and two experienced other toxicities, notably aseptic meningitis and mild cytokine release syndrome.
The clinical data is quite encour
Silly MTSL is one of the best stock newsletters two yrs ago Hubert ranked them #1 of over 240 stock newsletters. ZIOP is down with the sector since the Hillary tweet, the Shrekel disaster, cascading to Valeant etc, the blowing up of the PFE-AGN deal by treasury. MTSL is one of the best newsletters all time. a dip of small bio picks in a sector massacre does not change that
The next cohort (#3), which will receive a larger dose of the gene vector (1012 virus particles) and 40 mg/day veledimex for 14 days, may be the last tested. Regardless, the Phase 1 study should be completed in the months ahead, enabling the Company to discuss the design of a pivotal clinical trial with the FDA and EMA later this year and initiate the Phase 3 trial in 2017. Our financial model is based on an assumption that the pivotal trial is concluded in 2018, enabling Ziopharm’s therapy to launch in 2019.
Note that glioblastoma is a rare disease (74,000 cases diagnosed annually worldwide), but it is also a deadly one – it typically takes the life of the patient within 17 months of diagnosis, even with the best of care. The FDA has already granted Orphan drug status to Ziopharm’s IL-12 therapy for glioblastoma.
IL-12 + PD-1 inhibitor: Ziopharm recently reported results from a preclinical study that used a glioma model to evaluate its gene therapy in combination with a PD-1 inhibitor.1 As shown in Figure 2, the combination was far more effective than either drug alone.
1 Barrett, JA, et al. Localized regulated expression of IL-12 as a gene therapy concomitant with blockade of PD-1 for treatment of glioma. Presented at the American Society of Gene & Cell Therapy meeting, May 6, 2016.
Figure 2. Synergism between IL-12 & anti-PD-1 therapy.1 A preclinical mouse model of glioma (glioma cell line GL-261) was used to assess the efficacies of Ziopharm’s IL-12 gene therapy and two dosage strengths of a mouse anti-PD-1 antibody (RMP-14). Glioma cells (105) were administered orthotopically on day 0 and on day 5 the therapies were started with the administration of the IL-12 adenoviral vector (5 x 109 virus particles). The animals also received veledimex (30 mg/m2/day) or a vehicle for 14 days + the anti-PD-1 antibody (7.5 mg/m2 or 15 mg/m2, four-times daily) for five days. Another group of animals were treated with the anti-PD-1 antibody alone. Mice that received the combination therapy had the best survival compared with placebo and either monotherapy. In fact, all of the mice that received IL-12 and the higher dose of anti-PD-1 antibody survived.
Griffin Securities Equity Research 3
Ziopharm May 25, 2016
The study demonstrated that the combination of IL-12 and PD-1 inhibitor decreased the immunosuppression of the tumor microenvironment and enhanced immunostimulation that resulted in a significant increase in survival over controls and monotherapy.
Ziopharm will likely initiate a clinical trial this year to test the IL-12 gene therapy and a PD-1 inhibitor combination for glioblastoma. We note that Merck KGaA is developing an antibody targeting the PD-1 system in collaboration with Pfizer for a number of solid tumors. The lead indication is a rare condition, Merkel cell carcinoma that is an aggressive skin cancer. Avelumab has been granted Orphan designation by the FDA and EMA, and breakthrough status by the FDA for Merkel cell carcinoma. Perhaps the upcoming IL-12 gene therapy trial will involve Merck’s PD-L1 antibody.
IL-12 + NK cells: This combination is based on scientific evidence of IL-12’s ability to enhance the anti-tumor activity of natural killer (NK) cells by stimulating their growth and restoring full cytotoxic function to these cells in the vicinity of a tumor. Indeed, IL-12 induces NK cells to produce interferon-γ, an inflammatory cytokine that contributes to the environment favoring full cytotoxic NK cell activity.
This combination therapy will likely enter clinical development in 2017 for brain cancer.
COMPETITIVE CAR T CELLS UNDER DEVELOPMENT
The Company is preparing sophisticated CD19 CAR T cells (3rd generation) for clinical testing next year against a hematological malignancy. While other versions of this therapy are probably closer to commercialization, Ziopharm is working on various approaches to gain a competitive edge including expression of the cytokine IL-15 that enhances CAR T cell persistence in vivo, reducing the number of cells required to achieve a clinical benefit, developing a faster and/or less costly manufacturing process, and avoiding the need for lymphodepleting chemotherapy.
Meanwhile, a CAR T cell, whose antigen target has yet to be revealed, is being readied for a Phase 1 clinical trial that will enroll patients with a myeloid malignancy, such as myelodysplastic syndromes (MDS) or acute myeloid leukemia (AML). MDS, which is now considered a cancer, progresses to AML in about 30% of the cases. Both conditions are rare diseases in that about 13,000 cases of MDS and 19,950 cases of AML will be diagnosed in the United States this year.2 However, the prevalence of MDS is much greater, as these patients live longer than those with AML, despite having multiple relapses with today’s medicines.
EXPANDING THE THERAPEUTIC OPTIONS WITH NK CELLS
NK cells are scheduled to enter a clinical trial shortly that will enroll patients with AML. We believe this is just the initial application of these cells by Ziopharm for combating hematological malignancies and solid tumors.
AML is primarily a disease of the elderly that has evaded modern medicine over the past 30 years based upon no improvement in 5-year survival (unchanged at 10%) for patients older than 75.3 Cases with the worst prognosis are those in which AML is preceded by MDS, as most patients relapse after stem cell therapy even though it is considered the most effective treatment option. One escape mechanism used by cancer cells to evade immune detection is to undergo a mutation(s) resulting in a mismatch or loss of class I human leukocyte antigens. NK cells offer a viable treatment option, since they attack such abnormal cells.
The upcoming clinical study may well extend the lives of the participants. It should also provide Ziopharm with experience in the preparation, expansion, and dosing with NK cells that will be useful in follow-on trials, one of is scheduled to commence next year investigating the use of these cells in combination with the IL-12 gene therapy for brain cancer. We note that MD Anderson is conducting three clinical studies involving NK cells.4 One is evaluating the highest tolerable dose of NK cells in combination with chemotherapy and a stem cell transplant in patients with
2 Cancer Facts & Figures 2016. Published by the American Cancer Society.
3 Thein, MS, et al. Outcome of older patients with acute myeloid leukemia. Cancer (2013); 119(15): 2720. 4 See www.clinicaltrials.gov for: NCT01823198, NCT02573896, and NCT02271711.
Griffin Securities Equity Research 4
Ziopharm May 25, 2016
AML/MDS. The other two are employing ex vivo expanded autologous NK cells to treat children with relapsed/refractory neuroblastoma or recurrent posterior fossa tumors (i.e., brain cancer adjacent to the fourth ventricle).
GRAFT-VERSUS-HOST DISEASE – ON THE HORIZON
Two approaches are currently under development at Ziopharm and Intrexon for graft-vs-host disease (GvHD). One consists of regulatory T (Treg) cells that have been genetically modified to express interleukin-2 (IL-2) under the control of the RheoSwitch®. Treg cells have a central role in maintaining immune tolerance after hematopoietic stem cell transplantation, and low levels of IL-2 figure importantly in these cells’ development, activity, and survival. Chronic GvHD, which is characterized by a relative deficiency of IL-2, has been treated successfully in a clinical study involving administration of low daily doses. The treatment resulted in selective expansion of Treg cells, a rebalancing of two other cytokines that regulate hematopoietic cell expansion and survival, and improvement in clinical symptoms within eight weeks on therapy without having a general dampening effect on the immune system.5,6
The second product under development is based on Intrexon’s ActoBioticsTM platform, based on the GRAS- designated bacterium Lactococcus lactis, to generate a biologically active molecule in the gastrointestinal tract for a local or systemic condition. (This approach has been tested successfully preclinically with IL-2.7) IL-2 released in the GI tract should interact with the gut-associated lymphoid tissue, a major repository of innate and adaptive immune cells, possibly restoring Treg cells into the normal range. This approach may offer considerable benefit to patients whose GvHD involves the GI tract.
GvHD is a reaction of donor immune cells against the recipient’s tissues. About 35%-50% of hematopoietic stem cell transplant patients (23,000 transplants in the U.S. and Europe in 2013) develop acute GvHD and more than half will progress to the chronic disease.8,9 Approximately 50% benefit from the steroid methylprednisolone. Those who do not respond typically get a second-line immunosuppressive therapy, such as the monoclonal antibody infliximab (sold as Remicade® by Johnson & Johnson), and they generally have a poor prognosis. Prevention or improved treatment of GvHD may accelerate the rise in the number of patients eligible for allogeneic hematopoietic stem cell transplants at the same time that an aging of the population in developed countries increases the need for stem cell therapy.
One of the two therapies for GvHD may advance into clinical development next year.
5 Koreth, J, et al. Interleukin-2 and regulatory T cells in graft-versus-host disease. N Engl J Med (365(22); 2055.
6 Matsuoka, K, et al. Low-dose interleukin-2 therapy restores regulatory T cell homeostasis in patients with chronic graft-versus-host disease. Sci Transl Med (2013)
7 Steidler, L, et al. Mocosal delivery of murine interleukin-2 (IL-2) and IL-6 byrecombinant strains of Lactococcus lactis coexpressing antigen and cytokine. Infect Immun (1998); 66(7): 3183.
8 Cooper, LJ. Presentation/conference call on graft-versus-host disease exclusive channel collaboration, September 28, 2015.
9 Jacobsohn, DA and Vogelsang, GB. Acute graft versus host disease. Orphanet J Rare Dis (2007); 2: 35.
Thanks this Griffin report is a MUST READ - see see Msg 52599 on the investorvillage ZIOP message board for link to the actual report with color graphs and the important IL-12 Merck deal comments.
Results suggest patients with advanced brain cancer have a survival benefit with Ziopharm’s interleukin-12 (IL-12) gene therapy. Thus far, patients in the study have received an adenoviral vector (2 x 1011 virus particles intratumorally) and one of two doses of the activator veledimex orally (20 or 40 mg/day for 14 days). Six of the seven patients who received the lowest activator dose are alive with a median follow-up of 6.8 months. All patients were heavily pretreated, with the first cohort having had 2.7 prior lines of therapy on average and the second, 2.0. Historical data suggests their life expectancy would have been 3 – 5 months. The current cohort is receiving 40 mg/day veledimex, and the next cohort will receive a larger dose of the viral vector (1012 particles) and 40 mg/day of the gene activator.
Biological markers indicate the therapy is functioning as expected. Patients who were scheduled for surgery received an extra dose of veledimex one day prior to undergoing surgical resection of their tumor. The excised tissue was tested for the activator and it was found to be 30+6% of the level found in the patient’s plasma (17+6 ng/ml), thus confirming its entry into the brain. Ziopharm also tested for IL-12 and a downstream immune regulator, interferon-γ, in serum samples. IL-12 peaked on the day 3 and interferon- γ, on day 7, which is consistent with expectations. Also, Intrexon’s RheoSwitch® functioned as designed – it turned off expression of IL-12 upon cessation of veledimex administration.
The therapy has been well tolerated. IL-12 is such a powerful immune stimulant that it has caused severe toxicities when administered directly to patients. The gene therapy containing the RheoSwitch offers a safer approach by controlling IL-12 expression. In four patients of Ziopharm’s trial veledimex treatment was suspended due to adverse events (e.g., leukocytopenia and thrombocytopenia), and the toxicity subsided. The common reactions were headache, nausea/vomiting, fever, white blood cell or platelet decline, and altered liver function.
The Company has several options for future IL-12 studies. Ziopharm will probably meet with the FDA and EMA later this year to discuss a pivotal trial of the monotherapy. But two other studies are also in the queue: One will combine the gene therapy with NK cells and the other will involve a checkpoint inhibitor, possibly one under development by Merck KGaA.
PROMISING IL-12 THERAPIES
Monotherapy: The latest news from Ziopharm indicates that six of seven patients who had received 2.7 lines of therapy prior to enrolling in the Phase 1 study remain alive with a median follow up of 6.8 months following the IL- 12 gene therapy + surgery. (The first cohort was treated with the IL-12 gene therapy via an adenoviral vector [1 x 1011 particles] and 20 mg/day activator ligand for 14 days.) Historical data suggests that these patients had a life expectance of 3 – 5 months at enrollment based upon their personal clinical profiles. The follow-up time for patients in the second cohort is too short to get a reading on clinical activity. However, only four patients out of the eleven had a toxicity (e.g., leukocytopenia or thrombocytopenia) sufficiently severe to suspend treatment with the activator ligand. (One patient in the second cohort suspended veledimex therapy at the 40 mg/day dose until the toxicity subsided and then returned to veledimex at the 20 mg/day dose.)
Data that will be presented at the American Society of Clinical Oncology meeting on June 4th will include the therapies each patient received prior to the Phase 1 trial, evidence of tumor response to the IL-12 treatment (though we doubt the results will be telling, given the small number of patients), and biological responses (i.e., IL-12 levels in brain tissue and plasma, and interferon-γ in the serum). The survival benefit will be only slightly more mature.
The next cohort (#3), which will receive a larger dose of the gene vector (1012 virus particles) and 40 mg/day veledimex for 14 days, may be the last tested. Regardless, the Phase 1 study should be completed in the months ahead, enabling the Company to discuss the design of a pivotal clinical tri
HALF the patients died in this trial and its a huge success - expect less than half in the ZIOP glioma trial - if so it will be HUGE - we know Weds