Sometimes a rifle shot can only stop a single target and is not enough to
stop a herd. Similarly, a single monoclonal antibody (MAb) can only stop one
arm of the immune system. You need the power of a shotgun to stop multiple
branches of autoimmune diseases in its tracks. Neovacs' Kinoid vaccine
technology is a polyclonal antibody ("shotgun") approach to autoimmune
diseases, including systemic lupus erythematosis (SLE), or lupus.
• The key to treating SLE is the cytokine INFα (interferon alpha), but this comes
in 13 flavors. MAbs may halt a few INFαs, leaving the others to compensate.
A shotgun approach, however, covers all 13 isotypes. INF-Kinoids (INF-K) are
the SLE shotgun. Phase I/II data has shown that INF-K neutralizes all INFα and
shuts off INFα-controlled inflammatory genes. A phase IIb proof of concept
(POC) study (n=166) is underway in Europe and phase II studies in the U.S.
and China should initiate in early 2016.
• Bottom line. It’s all upside from here, in our opinion. As a result of the
prior TNF-K failure in rheumatoid arthritis (RA), Neovacs’ valuation has been
punished. We see this as a strategic advantage for investors, as the focus
should now be on INFα in SLE, a completely different cytokine (apples vs.
oranges). Early data has been promising, and Neovacs has seen biomarkers in
SLE that it didn't see in RA, giving more visibility and increasing the probability
of success, in our view. If the technology works in SLE, INF-K could be the
next Humira, and big pharma partners may be wanted.
Details
• Kinoid technology: active immunotherapy. Cytokines are like mediators of
the immune system and can be overexpressed or abnormally released in
autoimmune diseases, cancer, and allergies. Blockbuster anti-cytokine MAbs
targeting cytokines (such as Humira, Remcade, and Avastin) are given as passive
immunotherapy and have shown efficacy, but they have limits — most specifically,
the development of resistance. Kinoids avoid this problem by fusing inactivated
cytokines with the immunogenic protein KLH (keyhole limpet hemocyanin).
Kinoids (like INFα-K) are injected into the patient as an active immunotherapy that
induces a polyclonal antibody immune response against the endogenous cytokine
driving the disease. Kinoids allow the patient's immune system to generate a
response and avoid the development of drug resistance. In addition, they're far
cheaper to produce.
• INFα-K in SLE: Visibility increases the probability of success. Where is
POC in SLE? What target? What endpoint? These questions have yet to be
answered, resulting in SLE existing in a graveyard of failed drugs. However,
we now know that SLE is driven by INFα, and it’s the master regulator of the
inflammatory genes being turned on and causing tissue damage in SLE. In other
words, INFα — and thus, SLE — has a "gene signature" and can be measured.
The INFα-K phase I/II study showed that polyclonal Abs neutralize all subtypes
of INFα, and the gene signature goes negative; it shuts off. Neovacs now has
a target (INFα), a population (mild-mod SLE, INFα-gene-signature positive), and
endpoints (immunogenicity, biomarkers, and improved SLE activity score). Most
importantly, the company has visibility: the gene signature that may be a predictor
of disease activity. As a result, we believe that Neovacs’ probability of success
increases in the ongoing and upcoming phase II trials. POC data could come by
1Q17.
• Valuation. Our model assumes an INFα-K launch in 2020 in Europe, the U.S.,
and China. We discount back 30% in our free cash flow, discounted EPS, and
sum-of-the-parts models, which are equally weighted to derive a €4 price target.
Source : http://neovacs.fr/wp-content/uploads/analyse-maxim-octobre-2015.pdf
AMF. Actionnaire Néovacs le 21.10.2015
AMF. Actionnaire Néovacs le 21.10.2015
