IBRX - ImmunityBio: FDA Approval Potential In May Of 2023

2023-04-12 16:08:42 ET

Summary

• ImmunityBio, Inc. has a PDUFA date of May 23, 2023, for potential FDA approval of N-803 + BCG for the treatment of patients with BCG-unresponsive CIS non-muscle invasive bladder cancer.
• It is said that the global bladder cancer market could reach $11.5 billion by 2032.
• Initiation of phase 3 study using N-803 in localized BCG-unresponsive NMIBC papillary disease expected in 2023.
• Initiation of phase 3 study using N-803 in combination with PD-L1 therapy t-haNK, and aldoxorubicin for the treatment of patients with 3rd-line locally advanced or metastatic pancreatic cancer expected in 2023.

ImmunityBio, Inc. ( IBRX ) is a great speculative biotech play to look into. That's because I believe there is huge potential based on the fact that there is one major catalyst approaching in a few months. Especially, since IBRX stock is only trading at around $1.54 per share.

ImmunityBio is very risky, of course, like all biotechs, but there is great potential should it pan out. What I'm talking about is the potential for the company to receive FDA approval of N-803 [Anktiva] + BCG for the treatment of patients with BCG-unresponsive CIS non-muscle invasive bladder cancer [NMIBC]. There is a PDUFA date for review of this drug for this indication set for May 23, 2023.

N-803 For The Treatment Of BCG-Unresponsive CIS Non-Muscle Invasive Bladder Cancer

The most important clinical product in the pipeline would be the use of N-803 + BCG for the treatment of patients with BCG-unresponsive CIS non-muscle invasive bladder cancer [NMIBC]. It is a large market opportunity, should ImmunityBio eventually expand to other subpopulations of this indication. It is said that the global bladder cancer market could reach $11.5 billion by 2032 .

Before diving into what type of bladder cancer this is, it is important to go over what each of the drugs entail. N-803 is also known in the pipeline as Anktiva and it is cytokine fusion protein. It is a proprietary IL-15 superagonist which selectively activates NK cells and T effector cells without activating regulatory T cells that might dampen any type of response. In essence, being able to increase the effectiveness of cytokines and promote lymphocyte infiltration of a specific disease in question.

Now, with respect to BCG, it stands for Bacillus Calmette-Guerin and it is a main form of treatment for patients with bladder cancer. It can also be used to treat tuberculosis or leprosy as well. Now, moving on to BCG-unresponsive CIS non-muscle invasive bladder cancer. BCG-unresponsive, as the name suggests, means that patients don't respond with BCG therapy. When it comes to the term "CIS," it stands for Carcinoma In Situ, which means that it might look like cancer under a microscope but is there on the origin site, but has not spread to surrounding tissue yet. Non-muscle invasive bladder cancer is where the type of cancer is found in the tissue of the inner surface part of the bladder. In other words, it has not grown into the deeper part of the bladder wall. Bladder cancer is a type of cancer which begins in the cells of the bladder and it typically affects older adults. The most common type of symptom of bladder cancer is blood that may be found in the urine.

In a phase 2/3 open-label Quilt 3032 study , a total of 84 patients with unresponsive high-grade NMIBC patients were given BCG plus Anktiva weekly for a total of 6 consecutive weeks. After that, patients still were receiving therapy at specific time points, such as three weekly maintenance treatments once every 3 months for up to 12 months and then lastly once again at month 18. The primary endpoint of this phase 2/3 open-label trial is that a complete response [CR] of equal to or greater than 30% and lower bound of the 95% confidence interval must be greater than or equal to 20% for success.

This doesn't make much sense does it? In essence, for the primary endpoint to be met about 24 out of the 80 + patients must have achieved a complete response. This was what exactly was accomplished, in that it was noted there was a 71% complete response [CR] rate. This meant that about 58 out of 82 patients achieved a CR. As you can see, the expectation was not only met but was exceeded by a large margin when it came to the primary endpoint. The CR rate is important, but there are other important factors to look at also. The first being whether the CR lasted for an extended period of time (duration).

The final outcome was that there was an average duration of 26.6 months. Not only that, but at 24 months it was noted that 91.4% of patients avoided a cystectomy (surgery removal of all or parts of the bladder). Even better, disease specific survival was 100%. With this positive data in hand, ImmunityBio was able to submit a Biologics Licensing Application [BLA] to the FDA of N-803 for the treatment of patients with BCG-unresponsive CIS non-muscle invasive bladder cancer [NMIBC]. The BLA was submitted in May of 2022 and then was accepted by the FDA a few months later after that.

The key item is that investors have a major catalyst to look forward to with respect to this biotech. It is said that a Prescription Drug User Fee Act [PDUFA] date has been established for May 23, 2023. That is the date when the FDA is going to review this drug for this specific indication and should be a huge catalyst for this company.

Financials

According to the 10-K SEC Filing , ImmunityBio had cash, cash equivalents, and marketable securities of $108 million as of December 31, 2022. This is not a lot of cash, as you may or may not know, in the biotech world. As such, it chose to raise additional cash through a registered direct offering with multiple institutional investors. This would be done with the issuance of common stock as well as warrants for the purchase of additional shares of common stock that resulted in about $50 million in gross proceeds before deducting expenses .

On the other hand, if the warrants are fully exercised then that could result in additional gross proceeds of up to $60 million. This biotech has been relying on issuing shares of stock and warrants to stay afloat for the time being. Matter of fact, it had enacted a prior cash raise back in December of 2022, where it issues shares of common stock and warrants.

I believe that ImmunityBio, Inc. will likely need to raise cash again in 2023. It may choose to do so should it be successful in receiving FDA approval for N-803 (Anktiva) for the treatment of patients with unresponsive-BCG CIS NMIBC. If it does not receive FDA approval, then it may choose to wait to raise cash at a later time. It honestly depends how it all plays out in the coming month.

Conclusion

ImmunityBio, Inc. is a great speculative biotech play to look into. That's because it has a major catalyst for investors to look forward to. That is, it has a PDUFA date of May 23, 2023 for the review of N-803 [Anktiva] for the treatment of patients with BCG-unresponsive CIS non-muscle invasive bladder cancer [NMIBC]. In addition, the biotech does have an extensive pipeline as well. It expects to initiate a phase 3 study using N-803 for the treatment of localized BCG-unresponsive NMIBC papillary disease expected in 2023. Not only that, but it also expects to initiate a phase 3 study using N-803 in combination with PD-L1 therapy t-haNK and aldoxorubicin for the treatment of patients with 3rd-line locally advanced or metastatic pancreatic cancer in 2023 as well.

There are a few risks that traders/investors should be aware of before investing in this biotech. The first major risk deals with the upcoming PDUFA date of May 30, 2023 for the review of N-803 for the treatment of patients with NMIBC. There is no guarantee that the FDA will approve this drug for this indication. In the event that FDA approval for this drug is not given, the I expect the stock price to drop considerably.

A second risk to be aware of is what I noted above, in that ImmunityBio relies on selling stock to raise cash to fund its pipeline, as such it may need to do so again in 2023. This means that investors will likely be diluted again in the coming months. The only way that a cash raise can be avoided in the coming months is if it can establish a partnership with another pharmaceutical company for one of its pipeline products.

With an upcoming PDUFA date of May 23, 2023, plus several other programs in its pipeline, these are the reasons why I believe ImmunityBio, Inc. is a good speculative biotech play to look into.

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