BMYMP - Immatics: Additional Gains Possible Q4 Of 2023 With Data Update Of IMA203

2023-07-24 18:21:28 ET

Summary

• Bristol-Myers Squibb Company made a $35 million equity investment into Immatics N.V.
• The partnership with Bristol-Myers Squibb brought $15 million opt-in payment; Immatics also is eligible to earn up to $490 million in milestone payments in addition to tiered royalties on net product sales.
• ACTengine IMA203 was able to achieve a confirmed objective response rate of 67% in 11 heavily pre-treated solid tumor PRAME patients in Cohort A of the phase 1b study.
• Additional results from Cohort A of the phase 1b study, using IMA203 for the treatment of solid tumor PRAME patients, expected in Q4 of 2023; along with an update on the potential registration-directed pathway as well.

Immatics N.V. ( IMTX ) had received some good news lately as it gained a $35 million equity investment from Bristol-Myers Squibb Company ( BMY ). Prior to this equity investment, there already was a partnership agreement formed between the two companies. An opt-in was already achieved based on this partnership agreement in May of 2023 to advance adoptive cell therapies [ACT] candidates for the treatment of patients with solid tumors. With the partnership in place, plus the recent equity investment, this shows just how much Bristol-Myers Squibb is invested into advancing Immatics technology. The reason why is because of the uniqueness of the technology platform, which is capable of being able to attack proteins inside of the cancer cells.

Such uniqueness allows it the ability to be able to target hard-to-treat targets for cell therapies, such as solid tumors and other hard-to-treat cancers. The T-cell receptor therapy [TCR-T] IMA203 as a monotherapy had already established strong confirmed objective response rate [ORR] in treating 11 heavily pre-treated patients with various types of cancers in cohort 1 of an ongoing phase 1b study. A reason to watch this biotech would be a catalyst that is approaching. That is, Immatics intends to release a data update from this phase 1b study in Q4 of 2023. Not only that, but it also intends to provide guidance on whether or not there is a possible pathway towards starting registration-directed trials at the very same time.

Equity Investment And Partnership For Unique Technology Platform

As I stated above, Bristol-Myers Squibb just made a $35 million equity investment in Immatics . It purchased 2,419,818 ordinary shares in a private placement agreement at a price per share of $14.46. Additionally, it also obtained the right to appoint a member to the Immatics Scientific Advisory Board. Prior to this, there was a partnership agreement that was first made back in 2019, but then was ultimately expanded upon in 2022. Back in May of 2023, Immatics received an option payment of $15 million , because Bristol-Myers Squibb chose to use the option to advance the first of four T-cell therapy [TCR-T] candidate from their ongoing collaboration agreement. It would be eligible for up to $490 million in milestone payments and tiered royalties on net sales of any products.

A question that needs to be asked is, "why an initial partnership and further equity investment towards helping Immatics to advance its cell therapies as part of the ongoing collaboration agreement"? It all has to do with the uniqueness of its platform. Especially, when it comes to being able to target solid tumors and other hard to treat cancer types. Why is that? That's because other CAR-T therapies and current antibody-based therapy approaches are only able to target proteins on the cell surfaces. This is not bad, but think about being able to expand upon the proteins that could be targeted on cancer cells.

This is exactly what Immatics is doing with its technology is that it is able to go after peptide-bound human leukocyte antigen [pHLA] , which means the targeting of intracellular proteins. This not only increases the amount of targeted proteins, but could also open the door into more effective treatment of a therapy. With such a far more effective targeting option with its technology, it might be able to more effectively go after hard-to-treat indications likes solid tumors.

The point of Immatics being able to effectively target a wide range of cancer targets can be shown with respect to interim data that was released from a phase 1b study , using it technology ACTengine and TCR-T monotherapy candidate IMA203. This clinical candidate was able to establish a strong confirmed objective response rate [ORR] in a variety of types of solid tumor patients with PRAME. That is, in a Cohort A of an ongoing phase 1b study, using IMA203 for many solid tumors types, there was a 67% confirmed objective response rate [ORR]in 11 heavily pre-treated patients. In addition, the median duration of response [DOR] was not yet reached either at an average follow-up time of 8.5 months as of the time of the data cut-off, which was April 4, 2023.

The equity investment didn't cause a huge rise in the stock price as expected, but I believe that investors can still capitalize on major catalysts, which are approaching towards the end of 2023. The first is with respect to additional data to be released from Cohort A of the phase 1b study, which is using IMA203 for the treatment of patients with solid tumors. It is expected that Immatic will release additional results from this phase 1b study in Q4 of 2023. A second catalyst would then possibly be a possible-projected pathway towards being able to select one to two target indications for registration-directed trials. Such an update is expected around the same time in Q4 of 2023 as well.

Financials

According to the 6-K SEC Filing , Immatics N.V. had cash, cash equivalents and other financial assets of $358.7 million as of March 31, 2023. With this cash on hand, the projected cash runway was into 2025. However, the company is now even more well capitalized, because it doesn't include the two events that occurred with Bristol-Myers Squibb.

First, this doesn't include the $15 million opt in payment that made by this big pharma company. Secondly, it doesn't include the $35 million equity investment from it either. With the addition of these two financial transactions, I believe that Immatics should be well capitalized until at least 2025. Thus, there should be no risk of a cash raising activity for the remainder of this year.

Risks To Business

There are several risks that investors should be aware of before investing in Immatics. The first risk to consider would be with respect to Cohort A of the ongoing phase 1b study, which is using IMA203 for the treatment of patients with solid tumors. It is expected that an additional data update from this study is going to be released in Q4 of 2023. Even though the objective response rate [ORR] of IMA203 was durable thus far, there is no guarantee that this will be observed in the next data to be released.

A second risk to consider would be with the guidance update for the next stage of development of the IMA203 candidate. It is expected that Immatics might be able to announce a potential fast-to-market registration-directed trial pathway by Q4 of 2023 for this candidate, but there is no guarantee that this will happen.

A third risk to consider would be with respect to the partnership opt in by Bristol-Myers Squibb. This partnership seems to be coming along well, because Immatics just received a $15 million payment from the big pharma, along with a $35 million equity investment as well. The continuation of this partnership is largely going to depend upon how well the data eventually turns out with the first advanced TCR-t product candidate that has been selected towards the treating of patients with solid tumors. If Bristol-Myers Squibb doesn't like the data later on, then it might possibly terminate the partnership. Such an event would not only remove future milestone payments, but it could cause the stock price to trade lower significantly as well.

Conclusion

Immatics N.V. has been able to make significant progress in being able to advance its IMA203 TCR-T monotherapy candidate [produced under the ACTengine] to target 11 heavily pre-treated with solid tumors that express PRAME. This was evidenced with the release of interim data from Cohort A from the phase 1b study using IMA203 for this specific patient population. Bristol-Myers Squibb seems highly interested in this technology. Especially when you consider the $15 million equity investment to begin testing of a TCR-T for solid tumors, along with the most recent $35 million equity investment as well.

A good thing about Immatics N.V. is that its technology advancing TCR-based immunotherapies is not only with respect to ACTengine [autologous cell therapy] such as advancing IMA203. It is advancing ACTallo [allogeneic cell therapies] and T cell Engaging Receptors [antibody like TCR Bispecifics] as well. For instance, IMA402 is a novel TCR Bispecific construct targeting PRAME tumors. It submitted a clinical trial authorization [CTA] of TCER IMA402 to German regulatory authorities in April of 2023. A study using this candidate targeting solid tumor patients is expected to begin in the 2nd half of 2023. This creates another catalyst opportunity in which there will a release of results from this early-stage study in 2024.

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