Thanks for reading the Biotech Stock Mailbag.
Before I get started, a word or two of caution: OncoSec is a micro-cap biotech company with a single-digit stock price and an enterprise value of just $2.7 million. As of October, the company had $24 million in the bank and is spending about $4 million to $5 million per quarter.
I might actually say a few nice things about OncoSec. Don't pass out from shock. Don't accuse me of pumping, either. Take the risks seriously.
All right, with that said...
At the risk of sounding too dismissive about OncoSec's IL-12 cancer immunotherapy, there was a single patient's worth of intriguing data in the melanoma study presentation made last week. That's from a study of 22 patients. The complete response to Oncosec's IL-12 therapy seen in that single melanoma patient -- who had previously progressed on Merck's (MRK) - Get Report Keytruda -- is interesting enough to push the development of the product forward, but the data on the other 21 patients looked, to me, inconclusive. Not negative, per se, but hard to interpret.
OncoSec is among the scores of drug companies trying to find a solution to a biologic roadblock that, to date, has limited the efficacy of checkpoint inhibitors like Keytruda or Bristol-Myers Squibb's (BMY) - Get Report Opdivo to a minority of cancer patients.
Checkpoint inhibitors work by releasing the brake on the immune system, so these drugs are most effective against "hot" tumors already studded with T cells and other immune cells.
"Cold" tumors are largely resistant to checkpoint inhibitors because they lack significant engagement by immune cells. To extend the analogy, releasing the brakes without an engine present doesn't get you very far.
How to turn "cold" tumors into "hot" tumors? OncoSec's approach is to inject "cold" melanoma lesions with DNA-based interleukin-12 (IL-12), a protein that activates components of the immune system. OncoSec then uses a short series of electric shocks (delivered with needles) to open the membrane of the tumor cells and help the IL-12 to enter.
With that (rather long) introduction, let's get to the OncoSec data. You can download a presentation here.
The company conducted a phase II study involving 22 patients with melanoma predicted to be unresponsive to checkpoint inhibitors using two different biomarker assays. All the patients were treated with a series of pulsed IL-12 injections directly into their melanoma lesions followed by standard intravenous delivery of Keytruda.
After 24 weeks, the overall response rate to the IL-12/Keytruda combination therapy was 41%. Five patients achieved a complete response, four patients had a partial response. (Another patient had stable disease at 24 weeks but achieved a partial response at around one year.)
OncoSec is excited about the 41% response rate from the IL-12/Keytruda combination because it's higher than the 33% response rate typically seen with Keytruda alone in melanoma patients. The patients enrolled in the study had melanoma lesions deemed unlikely to respond to Keytruda, which makes the 41% response rate even more encouraging from OncoSec's perspective. There's also evidence collected in the study showing IL-12 increases immune cell involvement in the tumors.
But (and you knew there was going to be a but)....
The two biomarker assays used to identify melanoma lesions unlikely to respond to checkpoint inhibitors have not been approved or prospectively validated (although they are published.) This means OncoSec cannot be entirely confident the melanoma patients enrolled in its phase II study would not have responded to Keytruda alone.
The study also lacked a control arm, which makes interpreting results tricky.
For these reasons, the 41% overall response rate observed in the IL-12/Keytruda study is probably skewed high.
The best method to test the ability of OncoSec's IL-12 to turn cold tumors hot would be in patients with melanoma that didn't respond (or progressed) following an initial course of checkpoint inhibitor treatment.
There were nine patients in the OncoSec study previously treated with a checkpoint inhibitor. Among those nine patients, a single patient had a complete response following treatment with pulsed IL-12 and Keytruda. That patient also entered the study with a melanoma lesion that tested "cold" on the two biomarker assays.
(A second patient had a partial response to IL-12/Keytruda but the results of the biomarker assays were inconclusive.)
That one melanoma patient wasn't likely to achieve a complete response based on baseline characteristics and previous treatments, but he or she did. That's really interesting and suggests IL-12 may have played a role in turning a cold tumor hot.
But a single patient's worth of data is far from conclusive. It could be a mirage.
The next clinical trial proposed by OncoSec will also evaluate the combination of IL-12 and Keytruda but enroll only patients with melanoma that failed to respond to checkpoint inhibitors. That's the best patient population to enroll, although including a control arm is not in the plans. Too bad. I can see why designing a study with a control arm would be difficult but the effort would yield stronger, more convincing data, if IL-12 is doing what OncoSec hopes it is.
The company is suggesting this next phase II study might be sufficient to get IL-12 approved by the FDA, if positive. I would be skeptical about such a promise until the company gets something in writing from the FDA.
There are a few additional risk and limitations to consider about OncoSec's cancer immunotherapy approach. The electrically pulsed IL-12 must be injected directly into tumors, which could limit the addressable patient population. The electrical pulsing procedure isn't trivial. It hurts. OncoSec's presentation was light on details about IL-12's safety profile. Lastly, there is a lot of competitors trying to improve cancer immunotherapy in ways that could be better or easier to administer than OncoSec's IL-12.
I'm intrigued enough by the single patient with the complete response too IL-12/Keytruda to be interested in seeing more from OncoSec in the future.
Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.