DD Education: Which Cell Therapy companies present the best value? Part 2

We developed an analysis using public filings and annualizing the most recent quarters as of 12/31/11. As such, the accuracy is subjective to our proprietary algorithm, and this list is not mean to be all comprehensive.

We conclude that ex leaders Dendreon and MesoBlast make the space very inexpensive. The sample below represents just over $500 million in market cap for eight of the selected public companies (ex DNDN and MSB). These companies have 3 - PIII trials, 5 PII trials and several P1 trials (based on these crude metrics).

We conclude that is worth investors time to understand among these companies in terms of what they are doing and the associated probabilities of success of their trials. Recent data peaks from the Cardiology space suggests that Baxter (BAX) and their CD34 cell type may be very viable. NeoStem has a very similar approach. The retrenchment in MesoBlast shares since that company presented data at AHA in November is of concern. Cytori, Aastrom, Athersys all have active programs in cardiology while Athersys lead program is partnered with Pfizer for Ulcerative Colitis and Aastrom is entering a Phase 3 trial in CLI.

By price ($), Osiris, MesoBlast, and Dendreon are the highest $ priced stocks:

But that starts to change as we migrate to market cap:

And if we eliminate Mesoblast and Dendreon we get a better picture of the rest of the field:

And that picture changes as we adjust for debt and cash: (enterprise value). In all fairness here, we know that NeoStem with $20-$30 million in value from their China generic company, could be the cheapest name and others are / will raise capital but ex China, Athersys is the “cheapest name”.

Looking at R&D spending: IMUC, Prima and NeoStem are among the most efficient but in fairness one must adjust for the fact that Aastrom is embarking on a pivotal trial versus Prima just starting their P3 and NeoStem their P2.

Revenues: Here we have excluded NeoStem’s $65 million from China which means PCT (Cell Therapy CMO) is running at close to $10 million in annual revenues (currently).

Which Cell Therapy companies present the best value?

In the wake of a robust season of financings, and low valuations we revisit the basic questions in the cell therapy space, updating our tables for year end reported financials. Our numbers are forward looking and subjective to our proprietary algorithm, and this list is not mean to be all comprehensive.

Dendreon and MesoBlast remain the market leaders, but the best values by far are in the micro-cap space with names like Aastrom and PluriStem funded with strong balance sheets.

The sample below represents just over $875 million in market cap for eight of the selected public companies (ex DNDN and MSB). These companies have 3 - PIII trials, 5 PII trials and several P1 trials (based on these crude metrics).

We conclude that is worth investors time to understand among these companies in terms of what they are doing and the associated probabilities of success of their trials.

By price ($), Osiris, MesoBlast, and Dendreon are the highest $ priced stocks: 

By Price ($), Osiris , MesoBlast and Dendreon are the highest $ price:

But that starts to change as we migrate to market cap:

And if we eliminate Mesoblast and Dendreon we get a better picture of the rest of the field:

And that picture changes as we adjust for debt and cash (enterprise value):

Looking at R&D spend gives us an idea of who is spending what on clinical programs:

Stemline Announces Plans to IPO

Stemline Therapuetics has announced their plans to raise up to $50 million in an IPO. JMP Securities and Oppenheimer have been selected as the banks.

The company hopes to begin a Phase IIb trial next year for two products:SL-401 (third-line acute myelogenous leukemia AML); and SL-701 for newly diagnosed brainstem glioma and second-line glioblastoma multiforme (GBM). Immunocellular (IMUC) is pursuing a similiar indication.  SL-401 is an IL-3 receptor targeting agent. SL-701 is a vaccine composed of alpha-type-1-polarized dendritic cells loaded with synthetic peptides for glioma-associated antigen epitopes plus adjuvant poly-ICLC

Researchers have identified Cancer Stem Cells (CSCs) as the highly malignant "seeds" of tumors, typically comprising 1-5% of the tumor, that give rise to the majority (95-99%) of other tumor cells known as the "tumor bulk".  While standard therapies, including chemotherapy and radiation, may initially shrink tumors by killing tumor bulk, the failure of these therapies to eradicate CSCs may be a major contributor to treatment failure, tumor relapse and poor survival.

Accordingly, we believe that new therapies designed to target CSCs, in addition to tumor bulk, may represent a major advance in the fight against cancer. This premise has formed the basis of our drug development strategy, as illustrated.

Cowan updates their report on Immunocellular Therapeutics ($IMUC)

Immunocellular Therapeutics ($IMUC) is a Los Angeles-based clinical-stage company that is developing immune-based therapies for the treatment of brain and other cancers. The Company recently commenced a Phase II trial of its lead product candidate, ICT-107, a dendritic cell-based vaccine targeting multiple tumor associated antigens for glioblastoma.

Cowan and Company updated their research report to "Neutral (2)":

"Earnings reported; valuation has gotten rich, we remain on sidelines.

Cowan Summary: Through its 10K filing, IMUC reported 2011 financials and provided a pipeline update. We reiterate our Neutral rating and recommend that investors avoid IMUC shares given:

• Lack of significant newsflow (the only meaningful expected milestone in the next year is the interim Phase II data from the ICT-107 study in GBM, which is expected 1Q13), and especially
• Valuation, which at an EV around $175M seems very rich for a stock whose main asset has produced very limited clinical evidence of its efficacy and safety (single-site, single-trial, single-arm, open-label, non-randomized, uncontrolled, 16-19 patients, etc).

Clinical update: The Phase II trial of ICT-107 in GBM has enrolled 156 patients at 24 U.S. centers. IMUC plans to add more U.S. sites and expects to complete enrollment of ~200 patients in 2Q12. IMUC also plans to submit an IND with the FDA for ICT-121 in 1H12 and to initiate a physician-sponsored, Phase I trial, that will be conducted at Cedars-Sinai and is expected to enroll approximately 20 recurrent GBM patients following resection of tumor and standard of care treatment.

What's next?

• Complete enrollment in Phase II trial of ICT-107 in GBM in 2Q12, 2) initiate a physician-sponsored Phase I trial of ICT-121 in GBM in 1H12, 3) initiate Phase I/II trial of ICT-140 in ovarian cancer in 1H12, 4) report interim data from Phase II trial of ICT-107 in 1Q13, and 5) report final data from Phase II trial of ICT-107 in 3Q13/4Q13.
• Earnings reported. IMUC spent $2.9M ($2M in R&D, $0.7M in SG&A, and $0.2M in stock-based compensation) in 4Q and $8.6M ($5M in R&D, $2.4M in SG&A, and $1.2M in stock-based compensation) in 2011. IMUC ended 2011 with $6.7M in cash and raised $9.3M in net proceeds in a January secondary offering of 9.5M shares at $1.10/share, bringing its pro-forma cash position to approximately $16M or $0.26/share in cash. According to the company, current cash is sufficient to fund operations through the end of 2013.

Cowan Contacts:

Simos Simeonidis, Ph.D.

(646) 562-1386 simos.simeonidis@cowen.com

Yatin Suneja

(646) 562-1388 yatin.suneja@cowen.com

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ImmunoCellular Therapeutics ($IMUC) licenses EphA2 from University of Pittsburgh

ImmunoCellular Therapeutics (OTCBB: IMUC) has entered into an agreement with University of Pittsburgh under where Pitt has licensed intellectual property to the company surrounding EphA2, a tyrosine kinase receptor that is highly expressed by ovarian cancer and other advanced and metastatic malignancies.

This agreement grants a world-wide exclusive license to the Pitt intellectual property for ovarian and pancreatic cancers, and a world-wide non-exclusive license to the Pitt intellectual property for brain cancer.

Financial terms of the agreement were not disclosed. The company will employ the Pitt intellectual property in the development and commercialization of ICT-140, a multivalent, dendritic cell-based vaccine for the treatment of ovarian cancer.

Please see our other post(s) on IMUC, PrimaBioMed and Merck KG (StimuVax).

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ImmunoCellular ($IMUC): ImmunoCellular Therapeutics says its method for manufacturing ICT-107 has demonstrated meaningfully enhanced efficiency, consistency and convenience

• ImmunoCellular announced that its proprietary method for manufacturing ICT-107, its lead dendritic cell (DC) based vaccine for the treatment of glioblastoma multiforme (GBM), has demonstrated meaningfully enhanced efficiency, consistency and convenience, compared to other methods for producing DC-based immunotherapies.
• The manufacturing method employs a closed-bag system designed to produce highly potent DCs from white blood cells (WBCs) collected from patients, and for subsequently cryopreserving the DCs for future vaccine treatments.
• The process has also been optimized to produce high levels of certain cytokines that play a key role in initiating immune response.
• Despite variability in cell compositions collected from various patients, the product consistently met the purity and viability criteria reviewed by the FDA.

The final manufacturing process is not expected to require significant changes prior to eventual commercialization.  IMUC is working with Progenitor Cell Therapy (PCT) / NeoStem (NBS) for manufacturing.

Daily Dose Conclusion: IMUC looks like a compelling value given the phase 1 data, the manufacturing and the progress the company has made this year. We also like the fact that IMUC did raise capital earlier this year too.

ImmunoCellular Therapeutics ($IMUC) licenses mesothelin cancer antigen from Johns Hopkins

ImmunoCellular Therapeutics (OTCBB:IMUC) announced that they have entered into an agreement with Johns Hopkins University which sees the college grant an exclusive, worldwide license to intellectual property surrounding the tumor-associated antigen mesothelin.(The terms of the agreement were not disclosed).

Antigens are substances that cause the immune system to produce antibodies against it. Mesothelin is highly expressed in pancreatic cancer, ovarian cancer and mesothelioma.

The company will employ this intellectual property in the development and commercialization of ICT-140, a multivalent, dendritic cell-based vaccine for the treatment of ovarian cancer, one of multiple tumor types in which mesothelin is over-expressed.

ICT-140 is designed to target cancer stem cells as well as daughter cells in ovarian cancer by targeting multiple different antigens including mesothelin, Her-2/neu, IL-13Rα2 and several other undisclosed antigens.

ImmunoCellular president and CEO Manish Singh said: "As we continue the development of a novel, dendritic cell-based vaccine for the treatment of ovarian cancer, this licensing agreement for mesothelin technology will allow us to ensure that we have the critical components for a successful vaccine.

"We look forward to the ongoing support of Dr. Jaffee and her colleagues at Johns Hopkins as we develop the vaccine. We expect to file an Investigative New Drug application for the vaccine in the fourth quarter of this year."

IMUC recently started a phase II trial of its lead product candidate, ICT-107, a dendritic cell-based vaccine targeting multiple tumor associated antigens for glioblastoma. We do know that NeoStem's PCT is working with IMUC as the "contract maanufacturer".

Earlier this month the company received a "notice of allowance" from the U.S. Patent and Trademark office for its patent relating to the targeting of cancer stem cells in the treatment of patients with glioblastoma, an aggressive form of brain cancer.

The patent, called “Cancer Stem Cell Antigen Vaccines and Methods”, covers various methods of using dendritic cells combined with antigens derived from glioblastoma cancer stem cells.

Daily Dose Conclusion: The IMUC P1 Glioblastoma data is promising. The data set is smalla nd single center but if replicated in Phase II this could be the makings of the next Dendreon at a deep value. Also keep an eye on Prima BioMed working in ovarian cancer, also a dendritic cell approach.

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Dendreon (DNDN): Reports Monday Feb 27 at 9:00 am

Dendreon Announces New Time for Fourth Quarter and Year-End Financial Results Conference Call and Webcast Presentations at Upcoming Conferences

Call to be held on Monday, February 27, 2012, at 9:00 a.m. ET

SEATTLE--(BUSINESS WIRE)-- February 22, 2012 — Dendreon Corporation (Nasdaq: DNDN) today announced that management will host a conference call on Monday, February 27, 2012, at 9:00 a.m. ET to review fourth quarter and year-end financial results. This conference call was previously scheduled at 4:30 p.m. ET on the same date.

Access to the discussion may be obtained as follows:

Time:						9:00 a.m. ET / 6:00 a.m. PT
Date:						February 27, 2012
Dial-in:						1-877-548-9590 (domestic) or +1-720-545-0037 (international);
						conference pass code: 46511476
Webcast:						www.dendreon.com (homepage and investor relations section)

A recorded rebroadcast will be available for interested parties unable to participate in the live conference call by dialing 1-800-585-8367 or +1-404-537-3406 for international callers; the conference ID number is 46511476. The replay will be available from 12:00 p.m. ET on Monday, February 27, until 11:59 p.m. ET on Monday, March 5. In addition, the webcast will be archived for on-demand listening for 90 days at www.dendreon.com.

In addition, Dendreon Corporation also announced that management will present at the following conferences:

• RBC Capital Markets' Healthcare Conference in New York City, on February 28, 2012, at 3:35 p.m. ET
• Citi 2012 Global Healthcare Conference in New York City, on February 29, 2012, at 2:00 p.m. ET

The presentations will be audio webcast live and available for replay from Dendreon's website, www.dendreon.com. If you are unable to listen to the live webcasts, they will be archived on the site following the presentation. To access the replays, go to the Investor Relations section of the website.

Daily Dose Conclusion: Look for strong numbers this time around in Dendreon but remember that good numbers are baked intot he current share price that has rebounded from the lows this summer.  Immunocellular (IMUC) is a compelling value play to Dendrion these days.