IMCR - Immunocore: Attractive Commercial-Stage Biopharma

Summary

• Immunocore Holdings plc has one asset already in the market.
• It has a pipeline of TCR bispecific molecules targeting various indications.
• Immunocore Holdings looks attractive.

Immunocore Holdings plc ( IMCR ) is a midcap company with an approved drug and a pipeline of bispecific TCR drug candidates. The approved drug is KIMMTRAK, a gp100 targeting molecule approved in the U.S. and the EU for uveal melanoma. The asset will start a phase 2/3 study in advanced melanoma in the fourth quarter. Other drug candidates include MAGE-A4 targeting IMC-C103C and PRAME targeting IMC-F106C. IMC-C103C, co-developed with Genentech, is in phase 1 trial targeting a basket of cancers - NSCLC, gastric, head & neck, ovarian. Self-owned IMC-F106C is targeting NSCLC, breast, endometrial, ovarian, SCLC, melanoma.

The company's platform is called ImmTAX. It produces bispecific TCR therapies. That means, the product candidates consist of two elements - a TCR targeting system and an effector function. The role of the first element is to identify and latch onto a diseased cell with high affinity. The role of the second element - the effector element - is to either switch on or off the T cell, as required for that specific disease. So, if the disease is cancer, the T cell is switched on to attack the cancer cell. If the disease is an autoimmune disease, the T cell may be switched off to control the immune system gone haywire. So, ImmTAX stands for Immune mobilizing monoclonal TCRs Against X disease, or ImmTAX; if it is cancer, this becomes ImmTAC, or Immune mobilizing monoclonal TCRs Against Cancer - and so on.

The company IPO-ed in 2021, and immediately thereafter, it got its first approval. Metastatic uveal melanoma is an ultra-rare disease. There are 1000 patients in the U.S. and EU with mUM who present with HLA-02. Historical median survival is barely a year; KIMMTRAK is the first approved treatment. In trials, it was able to improve median OS by 6 months. The drug is now approved in more than 30 countries, commercial launch is ongoing in the U.S., and in Q2, the asset earned revenue of $33.7mn. The molecule was also added to both NCCN and ASCO guidelines.

The asset, also known as tebentafusp, is in development for a variety of indications. It has a collaboration with Sanofi for a combo trial in metastatic cutaneous melanoma with Sanofi's SAR444245. Recently, Immunocore presented updated clinical data from a Phase 1b trial of tebentafusp combined with checkpoint inhibitors in mCM at ASCO. In mCM patients refractory to anti-PD((L))1, tebentafusp with durvalumab continued to demonstrate promising overall survival ((OS)) (1-yr ~75%) compared to recent benchmarks (1-yr ~55%).

The molecule is also progressing with its phase 2/3 trial in advanced melanoma besides mUM. The trial is designed in an adaptive manner, so that the phase 2 portion of the trial with an OS and ctDNA dual primary endpoint will inform the design of the phase 3 portion.

From the rest of its pipeline, the company presented initial phase 1 data at ESMO from its IMC-F106C molecule. The stock dropped 25% on the data drop, however, there was no real logic behind the drop. There were 3 cytokine release syndrome AEs, but these were grade 1. 2 out of 6 patients with cutaneous melanoma, 2 out of 4 with ovarian cancer, and 3 out of 6 with tebentafusp-naïve uveal melanoma (UM) were found to have durable partial responses ((PR)). Six PRs were still ongoing including two for over two months. If this was the cause of the drop, this was strange because this is just phase 1 trial, and that, too, at a lower dose than MTD. I assume, therefore, the results are early indications of solid efficacy, and investors should not be expecting anything beyond that.

Besides these, the company also has a viral disease program based on the same bispecific TCR platform.

Financials

IMCR has a market cap just north of $2bn and a cash balance of $393mn. In the previous quarter, the company had net product revenue of $33.7mn. In July, the company raised $139.6mn through a PIPE financing. R&D expenses were $24.5mn and SG&A were $22.9mn. This gives them a cash runway well into 2025.

Bottom Line

IMCR makes a number of bullets in my checklist for good biopharma investments. It has an approved product, so it is heavily de-risked, scientifically. It has a logical platform that has gone through proof of concept with success. It has an emerging revenue stream with peak estimates of $200mn per year. It has a slew of pipeline candidates with staggered catalysts down the line. And while the stock isn't exactly cheap, it is trading at a 25% discount to its recent highs. All in all, IMCR is worth a small pilot position at this time.

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