There are now three available immunotherapy breakthroughs in cancer treatment: (1) Anti CTLA-4 therapy (ex. Yervoy); (2) Anti PD-1 therapy (ex. Keytruda, Opdivo); and (3) CAR T cell therapy (currently under development at Juno and Kite). Yervoy and Keytruda/Opdivo are “off the shelf” drugs, while CAR T Cell therapy requires harvesting T cells from the patient, genetically engineering them to attack the cancer cells, growing them in the lab, and then infusing them back into the patient.
Yervoy (given in the recommended dose) has a high rate of toxicity. Keytruda (which has topped Yervoy in progression-free survival and overall survival) has far less toxicity than Yervoy. CAR T Cell therapy has had high remission rates in early clinical trials, but there are serious side effects, including death (6 so far). Scientists are working on a fix for these side effects, which could take years.
One key benefit that SD-101 brings to a Keytruda/SD-101 combination, is that both therapies are “off the shelf.” In addition, the effective level of Yervoy/Keytruda can be reduced in a combination, and SD-101 has very little expected toxicity. Conversely, the Juno/Kite CAR T Cell Therapies, are individually created for each patient, and require a process to harvest, genetically engineer then grow T cells in a laboratory before infusion. If a combination of Keytruda (or Yervoy) and SD-101 produce synergistic efficacy, then that combination will move to the top of recommended first line therapies because both drugs are (1) off the shelf; and (2) produce less toxicity than any other treatment.
Eddie Gray spent 18 months at DVAX before he began speaking publicly about the DVAX cancer immunotherapy pipeline. His excitement over SD-101 is warranted, both in terms of the potential transformation of the Dynavax valuation, and the possibility that cancer patients may have an effective non-toxic, targeted treatment.
Last year’s American Society of Clinical Oncology (ASCO) conference was all about immunotherapy, and the biggest news was the clinical progress being made with checkpoint inhibitors targeting the PD-1 pathway. Even the poster presentations drew huge crowds. At that time, Merck’s anti-PD-1 drug pembrolizumab (Keytruda) was being tested in a large a Phase I trial for patients with metastatic melanoma and lung cancer. The principal investigator in this study was Antoni Ribas, M.D., Ph.D, of UCLA, who spoke at the Dynavax R & D day in December. The early Keytruda results in that trial led to expedited FDA review and approval. This year ASCO will be all about combination therapies, and DVAX is now designing a combo trial with an anti-PD-1 drug (TBD) along with SD-101. If DVAX plans to use Keytruda in the trial, then Ribas would be a perfect fit to head the planned combo trial and Merck might be a perfect fit to partner with DVAX in that trial.
What do you value a share of DVAX if SD-101, in combination with the anti pd-1 product (or radiation), boosts the complete response rate from say 35 percent to 80 percent, or something less than what isaac predicts, but still impressive?
Just to clarify, you're saying a $200 Billion market cap for SD-101, alone, if it's a "cure" for cancer (as part of a combo therapy).
Dr. Ron Levy, Stanford Director of Lymphoma Program (and former Stanford Chief of Oncology), heads the multi-center study of SD-101 in combination with localized low-dose radiation in patients with “watch and wait” B-cell Lymphoma. He spoke in December about his real time analysis of SD-101’s effectiveness at the tumor injection site (and at distant tumor sites). He knew then exactly what was happening at the SD-101 injection site, because the study uses real time biopsies to compare before and after. He specializes in Lymphoma, but said SD-101 might be effective in a range of cancers. His excitement was obvious--watch it yourself (DVAX R & D presentation in December 2014).
I think DVAX is reasonably worth at least $50 per share on approval of Heplisav alone. I think odds of Heplisav approval are greater than 50 percent. However, I continue to evaluate what DVAX might be worth solely on SD-101 (excluding Heplisav and the rest of the DVAX pipeline) if it becomes first line treatment in a range of cancers in combination with Opdivo/Ketruda/Yervoy or the newer (AZN) anti-PD-1L product. I think a successful SD-101 (alone) would be "transformative" to the DVAX valuation (as Eddie Gray has said). If SD-101 works, then $400 per share is an extremely conservative estimate. If this year (as Eddie Gray suggested) is a "break-out year for SD-101," then we won't have to wait much longer to find out.
Can please explain exactly how "potential value" of the non-Heplisav programs are "already built into the market cap?"
Eddie Gray is refining his presentations each time to more clearly emphasize that Heplisav is just one part of the Dynavax story. At Cowen, he explained the science, the program and the pipeline, and emphasized that DVAX is an immunology company with "multiple high value products." Heplisav is superior to the alternatives in every way. In fact, the novel adjuvant in Heplisav actually reduces the risk of rare autoimmune events because of its targeted effect. Its use in combination with other antigens (like HIV partnered with the Gates Foundation) might return many times what Heplisav will generate. The cancer immunology candidate (SD-101) produced stunning results in pre-clinical data. If it produces anywhere near the same response in the Melanoma trial, then Dynavax has a "transformative" blockbuster that propels the valuation of DVAX to the higher of the valuations proposed on this board. We should have some idea of the results this year. The asthma indication produced such "definitive results" that DVAX and AZN moved it to Phase 2. If that compound meets endpoints, another blockbuster. That's what I got out of the Cowen presentation. When Gray came on board DVAX, he did so knowing that DVAX was more than Heplisav. Now, I think he's finally well on the way to getting that message to the investing community.