Avid Bioservices Inc (CDMO)

[Protector]

PPHM's Bavituximab or TODAY THE GAME CHANGES

Today cjaddy posted this presentation of PPHM's Jeff Hutchins @ at Immune Checkpoint Inhibitors Conf. (Boston)..

I like to attract the attention to a number of IMPORTANT things that AMONGST OTHERS may explain what PPHM is doing and the turn they are making because THE PLAY FIELD JUST CHANGED (more below on that)

Enhancing the Power of Checkpoint Inhibition by Simultaneously Blocking Upstream & Downstream Targets: The Role of Phosphatidylserine (PS), a Novel, Global Immune Checkpoint

* Inhibiting PS using Bavituximab, a novel PS-signaling pathway inhibitor, blocks the immunosuppressive signal within the tumor microenvironment

* Assessing impact of immune stimulation through Fcy-receptor interaction on immune modulating cells

* Effects on multiple other immune effector cells will be presented

Note how GLOBAL is no longer a taboo since Dr. Birge (Rutger's) started to call it that and wrote it in his Nature magazine article. PPHM/UTSW (Late Dr. Thorpe, Dr. Brekken and CEO King) are calling it Upstream/Global and I like to call it SYSTEMIC because that is more in line with the terminology used in immunology. The very few and mild side effects of Bavituximab such as the mild fever are also systemic immune response reaction. But OK.

Secondly notice how DOWNSTREAM made it into the title of the presentation and how the details say that the effect on multiple other immune effector cells will be presented. Those OTHERS are the down-stream ,and more specifically, effector cells such as PS-receptor binding with TIM-3 that will be mentioned by Hutchins today.

THE GAME CHANCES TODAY

End of February I have given a well masked hint in this post about what is to start today by Hutchins presentation, that apparently was moved to a Prime Time slot.

Hutchins will today explain how Bavituximab, since it binds the PS-Ligand, blocks PS from binding with ALL PS-Receptors KNOWN. That are not only those on the cells that under the current MOA of Bavituximab have played a star role, M2 macrophages and MDSC's, but also several DOWNSTREAM cells that have PS-Receptors such as Axl,TIM-1,TIM-4 and TIM-3.

Furthermore, later from MSK unless someone else is allow to bring that news, we will learn that targeting the PS-receptors of ONLY ONE of these 2 UPSTREAMS or 4 DOWNSTREAMS is quite useless. You need to affect ALL the PS-Receptors (because nature also expected exposed PS as part of the appoptic process to affect them all together) and not just one, say TIM-3.

Only with PS-LIGAND binding, of which PPHM holds ALL THE IP for the antibodies, and that as well for the first generation Bavituximab as the fully humanized second generation BetaBodies, you can affect ALL receptors AT ONCE.

Let's have a look what Bavituximab actually is, possibly explaining the resistance against it and its disruptive nature, as I explained in in this post.. Then we'll go into the strategic and related REVENUE meaning of all this and possible in some TIMING as you are all waiting for the PPS to start going up sooner rather then later.

Bavituximab an I-O COMBO on its OWN

UPSTREAM: BLOCKING IMMUNE SUPPRESSION (TNG-Beta and IL-10)
- anti PS on M2 Macrophage to Block Immune Suppression
- anti PS on MDSC to Block Immune Suppression

UPSTREAM: IMMUNE STIMULATION (TNG-Alpha and IL-12)
- Bavituximab binding of FC-Gamma receptors on MDSC's, M2 Macrophages and Immature Dendric cells activate immune stimulation.

UPSTREAM: Auto-Immune ACTIVATION
- Triggers the Auto-Immune System and can prevent relapse.
--> Macrophage polarisation M2 --> M1 (M1=tumour finding ability)
--> Maturation of Dendritic Cell's AND M1 Macrophages
--> M1's do Tumour Destruction through ADCC (antibody dependent cell-mediated cytotoxicity)
--> Mature Dendric cells help T1's to produce TUMOUR SPECIFIC cytotoxic responses.

MIDSTREAM: TUMOUR ENVIRONMENT CONDITIONING
- anti PS conditions the Immuno Suppressive Environment create by PS in the bloodstream and:
--> re-enables the maturation of Dendritic cells that is otherwise blocked
--> re-enables the development of tumour specific cytotoxic T-cell responses (Naïve T-Cells)
--> stops unimpeded growth of the tumour previously supported by this environment

DWONSTREAM PS-Receptor Binding
- anti-Axl effect (Genetech has receptor binding version)
- anti-TIM-1 effect (Cellldex, has receptor binding version)
- anti-TIM-4 effect (Okkaido University, Japan has receptor binding version)
- anti-TIM3 effect (Novartis has receptor binding version)

Romulans, Klingons, Breen, Cardassians, ...
The disruptor, a science fiction plasma weapon used by the above alien species, is nothing against the TRIPLE DISRUPTIVE character of Bavituxiab that gives it great value if PPHM stays of the CHEMO Combo's.

DISRUPTION TYPE #1
Bavituximab invalidates a number of clinical pipelines of BP by making them obsolete. We are talking about the downstream anti's mentioned above that target the PS-Receptor instead of the PS-Ligand. With that much, if not all, of BP's related Intellectual Property (IP) becomes virtually worthless and large investments in the development of these I-O drugs are lost. Additionally, for companies like ROCHE that unlike Novartis have a much larger portfolio of antibodies with which the could have combined IN-HOUSE (no profit sharing) are gone. BP's involved loose weapons in the I-O war.

DISRUPTION TYPE #2
There is no Bavituximab equivalent for PS-Ligand binding and for having ALL the above described effects IN ONE. You can mix all downstream agents and drawn the patients with it to dose sufficiently to get all those cell's PS-receptors, but you still would NOT have the UPSTREAM effects.

This takes away the ability of BP to quickly engineer or mix together an equivalent for Bavituximab and it would certainly not be cheap because only to compensate for the downstream effect of Bavi you would need to produce 4 biologics. Then you still need to take care of the M2/MDSC's, the FC-Gamma binding on 3 cell types at least and neutralize PS in general because it keeps the auto-immune system from kicking in. So competition is set before the cheap, fast and large amount production ability of a single biologic, Bavituximab, for which they would need to produce about 10 AND test combinations in clinical trials.

And we didn't even say BETABODIES. These antibodies can go where no antibody has gone before :) (I am in StartTrek mode today :). They don't need blood, are smaller, have better statistical binding instance with PS, and can reach PS easier in more difficult locations such as on micro-vesicles.

DISRUPTION TYPE #3
This is the most IMPORTANT form of disruption. The exclusivity and total ownership of PS-Ligand binding IP being at PPHM creates a de-facto monopoly. The molecule fabrication has not been disclosed and BP depends completely on PPHM if Bavituximab and BetaBodies are going to be in their future.

But till there all that would not be THAT disruptive for BP, because as said before, BP couldn't care less about you and me. If their drug works and we buy it they don't care to keep a better solution with a combo drug from the market because it is not theirs and brings them no revenue and possibly even less revenue then selling their product alone.

But in this case BP has a problem, they are not fighting against little PPHM any more! That could have been the case in I-O MONO-Therapy where Bavituximab was a threat to move the SOC's MOS up and BP would have to beat it (and an approval after our PII registrational trial in 2nd ln NSCLC trial would have been such a case for one of the important cancers but the dose switching at our CRO - CSM in Fargo - saved them). Now, in round two of the I-O war, I-O COMBO-Therapy, they need to fight each other. And that suddenly makes PPHM an allie or asset because they currently hold the MOST POTENT, SAFEST I-O and ONLY GLOBAL/UPSTREAM/SYSTEMIC drug on Earth and probably far behind. SUNRISE in CHEMO combo's didn't change ANY of that.

CONCLUSION
ROCHE's, Norvartis and Celldex's anti-PS Receptor programs are under fire by Bavituximab and today that will be emphasized by Hutchins presentation. With AstraZeneca the above companies lost round one of the I-O war, MONO-Therapies, to BMY and Merck who won hands down, have current sales and income and have marketing running on full.

All 4, and some others, will fight to win round two, the I-O COMBO-Therapies, and will research and acquire as many anti-bodies as they can. I would not be surprised that the Moonshot 2020 initiative will be largely CRIPPLED by BP simply buying out the smaller players and allow them to do gov. sponsored research. It is cheaper then doing it themselves. But everybody understands that the REAL FRUITS of that will never end up in the MOONSHOT pockets so to say :)

PPHM's PPS appreciation is not something that must be based by definition on production revenue by selling bavituximab.

OK, let me be clear, Avid Manufacturing and hopefully Consultancy is great and top-grade but for NOW insufficient. It will support PPHMP by eliminating the risk of bankruptcy that otherwise many small caps are vulnerable to and it will facilitate research Bavituximab production and commercial launch within requirements of the FDA (certainly if there is a BTD part of it) and it will, certainly when Avid II revenue starts to show, support a basic level for the PPS. It will also help PPHM to remain without creditors or from encumbering IP or pipelines in the traditional way. But that is not what we are all waiting for, are we?

PPHM that, after the SURISE trials has been stoped and for sure has berried its going it alone scenario, clearly opened up. AstraZeneca gets more involved, not only in re-designing Durvalumab clinical trials, but also in setting the Bavituximab path. That is as good as extending the BoD with biotechnology VIPs. PPHM/MSK extend their collaboration as Worsley explained and they are seeing promising things. Could be that Hutchins MENTIONS them TODAY for some specific part of those things in relation to the ABOVE explanation.

If PPHM engages in selling EXCLUSIVE access to Bavituximab to BP's for use in their cocktails, an exclusivity in TIME and for well specified cancers types, then they can start generating SUBSTANTIAL revenue RIGHT NOW without ENCUMBERING their pipelines or IP. I developed that approach before. And they will ALSO no miss out on either licensing of Bavituximab, producing it themselves or even negotiate partial profits. That is the all point where BP wants small cap biotech to encumber their IP or pipeline, it is the CORE of there suffocation strategy followed by cheap acquisitions.

PPHM MUST realize that they have the COMBO drug of COMBO drugs and that they can therefore use a totally different approach in leveraging its value then is traditionally possible for small caps that have a mono-therapy drug that they have to launch and sell in competition with one or more BP's. If in that scenario you sit with BP you CANNOT them 'COMBO' exclusivity because BP is sitting there to either acquire you or encumber your pipeline with breadcrumb pre-payments and milestones, just sufficient to keep you above water till the drug is ready.

Bavituximab is NOT such product that has to engage in ONE-TO-ONE competition, the DOWNSTREAM players are doing that. But to be successful they need an allie, a friend, called the immune system that has its factories, know-how, scouts and troops all embedded in the body. And Bavituximab knows where that friends lives and can bring him in to do the heavy lifting.

It is a NEW CLASS of drugs and it allows for a NEW approach to market it and doesn't need PPHM to even wait for all the results of these many smaller clinical trials they will start. It probably will allow PPHM to not pay themselves for any of the registrational trials as BPs will want to be first and control that now that it is proven that being first becomes way more important.

Today the FIRST SEED will be publicly thrown out by Dr. Hutchins since Dr. Birge article in Nature Magazine. Sit back and enjoy how this deploys in time.