BCTX - BriaCell Therapeutics: Poised To Move To Advanced Trials But An Unconvincing Thesis

2023-09-10 00:26:34 ET

Summary

• BriaCell Therapeutics is developing a cell therapy vaccine for breast cancer using a research cell line that has been used for decades.
• The company's main therapeutic candidate, Bria-IMT, has shown preliminary safety and efficacy in clinical trials, but no objective responses were achieved with monotherapy.
• BCTX has a shaky financial position and will require additional financing soon, making it a risky investment.

Topline Summary

BriaCell Therapeutics ( BCTX ) is a biotech developing novel cell therapy for cancer, specifically breast cancer. The main difference maker for them is that they're developing what might just be the ultimate example of something off the shelf: a vaccine based on a research cell line that's been used for decades to study breast cancer. Unfortunately, I have strong reservations about taking this approach, and no clinical data really give me any more confidence. Couple that with a very shaky financial position, and you have the recipe for an unequivocal recommendation of "move on."

Pipeline Overview

Bria-IMT

The main therapeutic candidate that BCTX is moving forward in clinical trials is Bria-IMT, which is SV-BR-1 breast cancer cells modified to express HLAs and GM-CSF, essentially functioning as antigen-presenting cells with the hope of stimulating an anti-breast cancer immune response.

The company has published some proof-of-concept articles in open access publications demonstrating preliminary safety and efficacy. However, the lynchpin study at this time is an ongoing phase 1/2 trial that was presented at AACR 2023 . This trial enrolled patients with metastatic breast cancer to receive either Bria-IMT or Bria-IMT plus the PD-1 inhibitor retifanlimab.

No patients achieved an objective response with monotherapy, and 10% of patients had a response with the combination. Median progression-free survival was 77 and 80 days, respectively. It is worth noting that these patients were mostly hormone receptor-positive (54%-70%), and they had a median of 5 prior lines of therapy. There was also a signal that delayed-type hypersensitivity to Bria-IMT was associated with better PFS, but this did not reach statistical significance.

The company now plans a registrational trial with Bria-IMT, which has been discussed with the FDA with respect to appropriate study design with the FDA . The company also announced recently that Weill Cornell will initiate a trial of Bria-IMT in patients with high-risk, early-stage triple-negative breast cancer.

To date, neither of these trials has been initiated, according to releases from the company, and it is not clear when the company is going to be ready to get the pivotal trial started.

BCTX is also working on another project, Bria-OTS, which is a form of the same cell line but selected to match the HLA type of the patient they're transplanting into. This is based on preliminary observations that HLA matching led to a signal of improved efficacy in the Bria-IMT proof of concept studies .

Financial Overview

Per their most recent quarterly filing, BCTX held $28.2 million in cash and equivalents, with operating expenses reaching $5.7 million. After interest income and a change in fair value of warrant liability, the company recognized a net loss of $4.9 million.

At this burn rate, assuming expenses remain steady, BCTX has between 5 and 6 quarters of cash left to fund operations before they'll require additional financing.

Strengths and Risks

First and foremost on my mind when it comes to BCTX prospects is the cash position. Under almost no circumstances will the current reserves be enough to see themselves to commercialization, so that leaves the major question of how they'll fund operations. Partnerships would be most attractive to shareholders, but this is never likely. More likely is dilutive financing or debt that is getting more and more expensive to service due to rate increases.

Therefore, as a starter, anyone considering BCTX as a long-term hold should know that they're likely in for multiple rounds of dilution.

Then we come to the science, and I have to be honest: this is one of the more underwhelming prospects I've run into. The thought of using research cell lines to make a vaccine seems like an interesting idea at first glance, but then I remember that these are living cells subject to evolution, grown over innumerable generations in dishes and other media that do not replicate human cancer conditions. SV-BR-1 was patented almost 20 years ago , to give you an idea of how long it's been in use.

And I say that knowing full well they've presented findings from their phase 1/2 study. This presentation is great to see, but BCTX has not really had to subject itself to rigorous peer review. And there is not much impressive about an inability to shrink tumors. Yes, I understand that this was a heavily pretreated population, but in general, you're going to need to demonstrate bona fide activity if you're going to call your drug active. The fact that they appear to see some improvement in survival over historical controls could well be down to noise, and I have no reason to be confident that it would stand up to the scrutiny of a randomized trial.

Bottom-Line Summary

So here you have an early-stage company that will be running into serious cash issues very soon. They don't yet have data compelling enough to consider them de-risked, and the data they do have showed some mixed promise in an area of unmet need.

Certainly, there are some reasons to keep an eye on BCTX, but for now, I would not consider buying this stock to be any more than a gamble and a play on volatility. I will want to see more emerge from their studies before I am convinced of their unique, off-the-shelf immunotherapy approach.

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