AMAM - Ambrx Biopharma: Potential With Recently Released Prostate Cancer Data

2023-10-23 18:50:27 ET

Summary

• Ambrx Biopharma Inc. updated data of ARX517 for the treatment of patients with mCRPC shows encouraging anti-tumor activity with cohorts 6 through 8.
• In order to see if ARX517 can be improved upon for these patients with mCRPC, expansion of cohort 8 is underway and then dose escalation of cohort 9 was initiated.
• The global prostate cancer market size is expected to reach $27.51 billion by 2032; 10% to 50% of prostate cancer cases progress to the metastatic castration-resistant state of disease.
• Ambrx Biopharma has full rights to ARX788 outside of China; Its partner, NovoCodex, is going to seek regulatory approval of ARX788 for HER2+ breast cancer patients upon successful interaction with the NMPA.

Ambrx Biopharma Inc. ( AMAM ) has made great progress in advancing its pipeline towards several types of cancer therapeutics. One such drug would be the use of ARX517, which is an anti-PSMA antibody drug conjugate [ADC], which is being developed for the treatment of patients with metastatic castration-resistant prostate cancer [mCRPC]. It recently reported results from its phase 1/2 APEX-01 study in posters at the 2023 European Society for Medical Oncology [ESMO] Congress 2023 meeting.

The stock fell slightly on the back of this news by roughly 17% or so, but I believe that such initial data is not all that bad. Especially, when you consider that these were patients who had taken anywhere from 4 to 13 prior therapies for their metastatic disease. Not only that, but the company is already in the process of exploring higher dose cohorts.

It remains to be seen if a higher dosing of ARX517 achieves superior efficacy, but quite a possibility nonetheless. The company is also advancing another clinical candidate by the name of ARX788, which is an anti-HER2 ADC for the treatment of patients with HER2+ metastatic breast cancer patients. However, it has paused the internal development of this program itself and its partner in China NovoCodex is currently running several studies. Positive results were reported from the ACE-Breast-02 phase 3 study in March of 2023 and its partner will seek marketing approval in China pending positive communication from the National Medical Products Administration [NMPA]. Ambrx holds complete rights to ARX788 outside of China and thus there might be potential to bring a partner on board.

ARX517 For The Treatment Of Patients With Metastatic Castration-Resistant Prostate Cancer

A program that Ambrx Biopharma is highly focused on, would be the advancement of ARX517, which is being developed for the treatment of patients with metastatic castration-resistant prostate cancer. As I stated above, it reported updated safety and efficacy data using ARX517 for the treatment of this patient population from the ongoing phase 1/2 APEX-01 study. Such positive results were presented at the 2023 European Society for Medical Oncology [ESMO] Congress 2023 meeting, which took place in Madrid, Spain between October 20th - 24th of 2023. The global prostate cancer market size is expected to reach $27.51 billion by 2032 . However, the intended goal of this biotech is to target a specific prostate cancer patient population. That is, such prostate cancer patients who are metastatic castration-resistant. It is said that approximately 10% to 50% of cases progress to a metastatic castration-resistant state within 3 years of diagnosis. Newly published data from the phase 1/2 APEX-01 study, showed that treatment with ARX517 was active in treating patients. The more prominent anti-cancer activity was observed in the doses of drug ranging from 2.0 to 2.88 mg/kg, which is cohorts 6 through 8 respectively. It was stated that 52% of patients [12 out of 23] experienced a ?50% PSA reduction . Plus, there were some other positive clinical findings as well. Not only was positive clinical activity observed, but it was also shown that there were no treatment releases of serious adverse events [SAEs] or dose-limiting toxicities [DLTs] observed either.

Despite the stock trading lower on the back of this news, I believe that there could be potential here based on a few opportunities. First, I believe that the data is still strong, despite the stock reaction. How so? These were patients who took a range of anywhere from an average of 4 to a maximum of 13 prior therapies before entering this study. That is, these metastatic castration-resistant prostate cancer patients are at a point where they need to start finding clinical trials to enter as there is no other option for them. They have already exhausted the available treatment options that were available to them.

Secondly, I believe that there could be a small chance at recovery and it honestly depends upon what happens with the next set of data. Ambrx has already started expanding the phase 1/2 APEX-01 study of ARX517 in two possible ways. The first is that it has expanded recruitment of cohort 8 with additional patients [This is the 2.88 mg/kg dose of ARX517]. The second possible way for shareholder improvement could be dose escalation of higher dosing. That is, to treat mCRPC patients in cohort 9 with a higher 3.4 mg/kg dose of ARX517. Again, it remains to be seen if cohort 8 expansion and cohort 9 dose escalation improves upon efficacy observed thus far, but it is a catalyst to look forward to nonetheless.

Financials

According to the 10-Q SEC Filing , Ambrx Biopharma had cash, cash equivalents and marketable debt securities, available-for-sale [MDS] of $235.1 million as of June 30, 2023. The reason for the cash on hand is because in July 2023, it announced a registered direct offering of approximately $75 million of its American Depositary Shares [ADS] at a price of $13.93 per AD. This helped it to raise additional shares so that it could keep itself funded. It believes that this cash on hand will be enough to fund itself for at least the next 12 months. I believe that it will likely need another cash raise at some point in 2024. Thus, there is a risk of near-term dilution that remains.

Risks To Business

The first risk to consider is with respect to the ongoing phase 1/2 APEX-01 study, which is using ARX517 for the treatment of patients with metastatic castration-resistant prostate cancer [mCRPC]. Even though data was sufficient for now, there is no guarantee that the next set of results coming from the expansion of cohort 8 and dose escalation of cohort 9, will yield superior data. Another aspect to consider would be the safety of this drug as well. That's because even if efficacy is good, it won't mean much if there is a dose-limiting toxicity [DLT] or serious adverse event [SAE] that occurs.

A second risk to consider would be with respect to the advancement of the other drug in the pipeline known as ARX788, which is being advanced for the treatment of patients with HER2+ metastatic breast cancer. As I stated in the beginning above, the primary efficacy endpoint was met, thus the goal is for Ambrx's partner NovoCodex to file for regulatory approval in China. There is no assurance that the National Medical Products Administration [NMPA] in China will accept the application filing, nor that ARX788 will be approved for this breast cancer indication.

The third and final risk to consider would be the financial position that it is in. Despite the $75 million registered offering, it will likely only be enough cash to fund itself for at least the next 12 months. This means that the company at some point in 2024 will have to start looking for ways to raise additional cash.

Conclusion

Ambrx Biopharma Inc. has made significant progress in being able to advance the use of ARX517 for the treatment of patients with mCRPC. Despite the mute market reaction, I believe that there could be room for it to grow.

For starters, the patient population was dire, whereby they went through and exhausted anywhere from an average of 4 to a maximum of 13 prior therapies. It is expected that the global prostate cancer market is expected to reach $27.51 billion by 2032. As I stated above, about 10% to 50% of cases progress to the metastatic castration-resistant state within 3 years of diagnosis.

Secondly, the biotech has already pressed on with dose expansion of cohort 8 and dose escalation of cohort 9 as well. Should the higher dosing of ARX517 yield superior efficacy, along with tolerable safety, then there will be a huge chance of shareholder value being created. With respect to the other candidate of ARX788, Ambrx retains all rights of this drug outside of China. If its partner can obtain FDA approval for this candidate in the China region that would be another huge positive for Ambrx Biopharma Inc. shareholders, but this remains to be seen.

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