IBRX - ImmunityBio: Upcoming PDUFA Solid Data Confusing Finances

Summary

• ImmunityBio, Inc. presented strong data from its lead asset in multiple indications.
• Lead indication has a May 23 PDUFA.
• I am not sure I understand how this company operates, in terms of money, I mean.

ImmunityBio, Inc. ( IBRX ) is another Patrick Soon-Shiong company, one of the relatively more successful ones with an asset called N-803 or Anktiva under BLA review for bladder cancer, and also in a phase 3 trial targeting Non-Small Cell Lung Cancer. Anktiva is an antibody cytokine fusion protein, which enhances the activity of NK cells and cytotoxic CD8 T-cells. The company calls it "a novel interleukin-15 (IL-15) superagonist fusion protein consisting of high-affinity mutant IL-15N72D fused to the IL-15 receptor ? sushi subunit and linked to the Fc portion of IgG1 Fc."

I can hardly translate all of that in layman's terms (I mean, layperson's terms), but for purely investment purposes, all you need to know is how the molecule fared in a clinical trial. The rest of the jargon, you can safely leave it for scientists to enjoy - except if something becomes important later on. Suffice it to know that the IgG1 Fc thingy is the antibody portion of the protein, while the rest is the cytokine part.

The entire pipeline looks like this:

Key asset is Anktiva; despite the varied pipeline, I think we can safely ignore anything else that they have, for now. Our focus should be on the bladder cancer indication, which is the lead, as well as NSCLC, 1st and 2nd or greater line.

Lead indication is BCG-unresponsive NMIBC (non-muscle invasive bladder cancer) CIS (carcinoma in situ), which is a type of bladder cancer that hasn't spread around much, and which is unresponsive to BCG or Bacillus Calmette-Guerin, a type of intravesical immunotherapy developed from a strain of bacteria. Anktiva has breakthrough and fast track designations for this indication. It also has Fast Track designation for BCG-unresponsive NMIBC papillary and BCG-naïve NMIBC CIS.

Last year, the company reported strong data for this indication:

In cohort A consisting of 83 patients with BCG-unresponsive non-muscle invasive bladder cancer ((NMIBC)) carcinoma in situ ((CIS)), 59 (71%) had a complete response with a median duration of response at 24.1 months.

That exceeded the historical response rates of 41% and 18% for FDA-approved therapies pembrolizumab known commercially as Keytruda, and chemotherapy agent, valrubicin, respectively.

Based on this data, the company filed a BLA with the FDA, and their PDUFA date is May 23, 2023.

Here's a more detailed look at their oncology pipeline as of March 2022:

In terms of BLA-enabling data, the QUILT 3.032 trial met the primary end points for both BCG-unresponsive NMIBC CIS and papillary in October 2021, with a complete remission rate of 72% and a 12-month disease-free rate of 57%, respectively. Other data:

Data presented at the ASCO Genitourinary Cancers Symposium in February 2022 showed a complete response in 59 of 83 patients 71% CR rate (95% CI: 60.1, 80.5) and a median duration of CR of 24.1 months. In those patients who responded to the investigational therapeutic, the probability of avoiding both progression of bladder cancer and cystectomy at 24 months exceeded 90%. The combination of Anktiva and BCG had a well-tolerated profile with 0% treatment-related serious adverse events (SAEs), 0% immune-related AEs, and 100% bladder cancer-specific overall survival at 24 months. Low-grade treatment related AEs include dysuria, hematuria, and pollakiuria (all 16%), urgency (14%), and bladder spasm (8%), all other AEs were seen at 6% or less. No immune-related SAEs have been observed.

In BCG-Unresponsive Papillary cancer, data showed:

"a 12-month disease-free rate of 57% (95% CI: 44, 68) in the papillary Cohort B, in which 73 of 77 patients (95%) have not progressed to radical cystectomy after a median duration of follow-up of 20.7 months, and a 99% bladder cancer-specific survival through the January 2022 data cutoff."

In NSCLC, after seeing positive data in a phase 1/2 trial, the molecule also saw positive data in a single-arm Phase 2b multi-cohort basket trial (QUILT 3.055) of Anktiva and checkpoint inhibitor combinations in patients who have previously received treatment with PD-1/PD-L1 immune checkpoint inhibitors:

Data presented at the ASCO Annual Meeting in 2021 showed that despite the patients' prior progression on checkpoint inhibitor therapy alone, upon entry into the trial the majority of patients experienced clinical benefit either as stable disease (49%) or a partial response (9%).

In pancreatic cancer, "82% of patients (14/17) with advanced pancreatic cancer achieved disease control following combination therapy including Anktiva and aldoxorubicin."

More data from this indication:

In January 2022 at the ASCO Gastrointestinal Cancer Symposium, we reported that 27% of third-line or greater patients (17/63) remain on study and that the median overall survival in this highly advanced group of patients (who failed two to six prior lines of treatment) is 5.8 months (95% CI: 3.9, 6.9 months) exceeding the approximately three-month historical median overall survival. Of the 63 patients, 30 (48%) had progressed after two prior lines of therapy. Median overall survival in this group was 6.3 months (95% CI: 5.0, 9.8 months), more than doubling the historical overall survival. (Survival of three months as reported by Manax et al ASCO GI 2019).

In TNBC:

The exploratory Phase 1b/2 trial in nine patients with advanced TNBC showed a disease control rate of 89% with a complete or partial response of 67% (6/9), including two patients (22%) with a complete response to the combination therapy. The median progression-free survival was 14.3 months with median overall survival of 20.2 months as of December 2020.

In glioblastoma multiforme:

Out of 28 patients, investigator assessment of best overall tumor response reported three patients with a partial response, seven patients with progressive disease, and 11 patients with stable disease.

I have put together every trial data that was made available in their 10-K from last year. That's a lot of data, and it will take more than one article to analyze it all, and compare it with other molecules. I just want to note that in every indication, there's been drug activity. In pancreatic cancer, the company itself mentions how the data is better than historical control data. Evaluate says, though, that the results are confounded by the multiple treatments some of these patients have formerly taken, or taken alongside Anktiva in this same trial.

Financials

ImmunityBio, Inc. has a market cap of $1.92bn and a cash balance of $111mn, and a staggering total debt, I am guessing mostly to Mr. Soon Shiong in some form or another, of $714mn. The company had total operating expenses of $90mn, of which $71mn was in R&D and $19mn was in SG&A. At that rate, a normal company would have nearly no runway, however, with billionaire Mr. Soon Shiong behind the company, this isn't something that can be said easily.

IBRX was recently awarded $157mn in arbitration for its dispute with Sorrento. I discussed some of this at length in a Sorrento article . IBRX is also likely going to get another nearly $157mn through a private stock offering, a loan, and a debt-to-stock conversion.

The company recently did a small restructuring at its Dunkirk manufacturing facility.

Bottom Line

Fate Therapeutics' (FATE) recent flop with NK cells has put a spotlight on the troubling data at some of the NK cell companies. However, ImmunityBio, Inc., a leader in this space, has consistently produced solid data. One reason for its success could be its intravesical delivery route, which puts the medicine directly inside the bladder. However, all things considered, I have reservations about investing in any company where a high net worth individual has a high stake. I am not coming from the left side here - far from it. My reservation stems from the presumption that the prospects of companies such as ImmunityBio, Inc. are suited towards the interests of the HNI owner.

These companies could turn out great medicine, doubtless; but their finances are difficult to understand. For example, by any measure, a late stage $2bn company should not have $111mn in cash when its trial data has been so good - and neither should they have $700mn of debt. These things are hard to understand. Therefore, I plan to stay on the sidelines for ImmunityBio, Inc. despite the promising data and upcoming PDUFA.

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