SA article—Cancer research highlights: Oncosec attempt to pivot off “Negative” results.
Please note that I ( name not provided) am affiliated with Avisol Capital Partners and their Total Pharma Tracker service. They have also covered the companies in this article in their writings, and I wanted to make readers aware of the potential for overlapping coverage.
OncoSec Medical (ONCS) has built a lot of hype over the past several years with their attempt at a next-generation immune stimulator. They specialize in delivering the pro-inflammatory cytokine IL-12 directly to tumors using electricity. Some encouraging past data indicated that this cytokine could be used to help stimulate an immune response in certain tumors that would not respond to immune checkpoint inhibitors.
Thus, ONCS has plowed forward full bore with clinical trials intended to test the combination of their IL-12 delivery method and anti-PD-1 antibodies like pembrolizumab.
The news
ONCS reported preliminary findings from their phase 2b KEYNOTE-695 study, which combines their IL-12 method with pembrolizumab in patients with metastatic melanoma. The patients in this study had prior exposure and subsequent progression on a PD-1 inhibitor, suggesting that their tumors had become resistant to immune checkpoint inhibition.
The company divulged data from the first 9 patients to have completed 12 weeks of therapy and undergo an evaluation. Two of these patients achieved a partial response and another achieved stable disease as a best response. While this response rate appears to be low, it is worth remembering that these responders had either never achieved or lost response to anti-PD-1 therapy.
One of the trial investigators, Adil Daud, provided a comment: There is currently no approved therapy for the KEYNOTE-695 patient population. A 10% response rate is considered meaningful in this cohort, since this is about what we expect with additional chemotherapy, however, such responses lack durability. The preliminary tumor responses (22% BORR and 33% DCR) and supporting immune data observed here for the first time are important.
Looking forward
The results here appear to be an encouraging early sign of efficacy for the combination, given the difficult-to-treat population being targeted. However, the patient numbers are too low to say anything definitive, one way or the other. Certainly, the market thought harshly of the results, with ONCS taking an immediate 50% haircut in the aftermath of these findings.
ONCS followed up quickly with an announcement that they had dosed their first patient in another phase 2 trial targeting breast cancer, which would appear to be some well-timed damage control.
But the big questions are these: what really caused the stock market rout of ONCS, and is not a good time to take the jump in? Well, to the first question, I think the answer may be pretty clear: past data indicated that this trial would be a roaring success, with a ceiling for the response rate appearing to be 40%, which would be spectacular in this population. The company has been stable at a relative high since late last year when they presented preliminary data.
But the phase 2 has not been a strong consolidation of those results, early though they may be. And it would seem that this has deflated the hype balloon by quite a bit. This creates an interesting opportunity for those who are tolerant of risk. ONCS could very well come back in 6 months with a larger data set and confirmation of their higher observed response rates. At that point, you will very likely see a rapid doubling of the stock.
However, as you can see from the rout, current shareholders are voting with their feet, and they don't feel amazing about the long-term prospect of this approach. From my end, I don't quite see a reason to feel this down and out about the tech. To me, it looks like encouraging early data, although I am inclined to agree with critics that ONCS will need to generate something a lot more compelling to warrant a submission to the FDA.
Key investment takeaways
ONCS continues to be a company that works hard to control its optics. It is perfectly reasonable to expect that they'll deliver on a longer-term follow-up of these data by about the time of ASCO next year, so you have a potential meteoric catalyst, considering the company is currently sitting at a market cap of around $50 million.
Of course, by no means is a positive readout an assured thing. The data so far do not paint a picture of clear efficacy, only a promising signal. ONCS will need to have a very good showing for their next round, or this stock is probably going to lay flat for the foreseeable future.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
