XNCR - Xencor: Data In Early 2024 Could Bring Shareholder Value

2023-10-27 11:56:53 ET

Summary

• Xencor is expected to release data from a phase 2 study in early 2024 targeting patients with mCRPC and gynecological cancers, which could generate shareholder value.
• The global metastatic castration-resistant prostate cancer treatment market is expected to reach $17.71 billion by 2029.
• Xencor is also planning to evaluate vudalimab in combination with chemotherapy for the treatment of patients with non-small cell lung cancer; the Study is expected to start before the end of 2023.
• The global non-small lung cancer market size is projected to reach $36.9 billion by 2031.

Xencor, Inc. ( XNCR ) has been making great progress for its pipeline. Matter of fact, it has an extensive pipeline it is working on. I believe that there is a data release, which is expected in the early part of 2024, which might provide some shareholder value. This would be with respect to results expected from a phase 2 study, with multiple shots on goal.

Specifically, there are going to be three data releases to be released from a mid-stage study. The first two are going to include the use of vudalimab as a monotherapy for the treatment of patients with metastatic castration-resistance prostate cancer [mCRPC] and advanced gynecologic malignancies. The third is going to be the use of vudalimab in combination with chemotherapy or a PARP inhibitor for the treatment of patients with mCRPC.

The point here is that with this many data releases on the way in early 2024, I believe that some Xencor, Inc. shareholder value could possibly be generated here. In addition, it also intends to use this drug for the treatment of patients with locally advanced or metastatic non-small cell lung cancer. Vudalimab is only one of 11 or more bi-specific monoclonal antibodies being developed for the treatment of patients with multiple types of cancers. Lastly, it also has been able to provide other pharmaceutical companies use of its Xtend Fc domain technology, plus establish other partnerships as well.

Vudalimab Alone As A Monotherapy And In Combination Could Yield Substantial Data

As I stated above, there is an opportunity for Xencor, Inc. shareholders here with respect to data that is rapidly approaching. That is, it is expected that it will release results from its phase 2 study using vudalimab for the treatment of several patient populations in early 2024. Xencor is advancing the use of its drug vudalimab alone as a monotherapy for the treatment of patients with metastatic castration-resistant prostate cancer and advanced gynecologic malignancies. This would be the first two shots on goal in terms of clinical data that should be expected.

Then, there is another shot on goal with respect to the use of vudalimab for the treatment of patients with mCRPC, However, this other shot at mCRPC is going to be evaluated with vudalimab in combination with chemotherapy or a PARP inhibitor for the treatment of this patient population. This biotech is not going to wait to generate clinical data before advancing to another indication. For instance, it is already expected to initiate another study by the end of 2023 using vudalimab. This other trial is going to be the evaluation of vudalimab for the treatment of first-line locally advanced or metastatic non-small cell lung cancer [NSCLC] patients. This mid-stage trial is going to be split up into two parts as follows:

• Part 1 - Evaluation of vudalimab in combination with chemotherapy for the treatment of patients with first-line locally advanced or metastatic non-small cell lung cancer
• Part 2 - Randomization of either vudalimab + chemotherapy or KEYTRUDA [pembrolizumab] plus chemotherapy.

While still highly speculative and early in nature, should at least one of these indications turn out to be positive, then it will mean the ability to go after a large market opportunity. For instance, the global market opportunities for each of these populations are going to be substantial. For instance, the global market opportunities for each are as follows:

• The global metastatic castration-resistant prostate cancer treatment market is expected to reach $17.71 billion by 2029
• The global genitourinary drugs market size was estimated to be $29 billion in 2022 and then grow at a CAGR of 1.1% from 2023 to 2030
• The global non-small lung cancer market size is projected to reach $36.9 billion by 2031 .

One thing to note is that genitourinary refers to various types of disorders. The reason why is because the term refers to the reproductive system and urinary system. Thus, the genitourinary segment is the targeting of the following: Prostate cancer, bladder cancer, ovarian cancer, cervical cancer, renal cancer and other disorders. Vudalimab is a bispecific antibody that is being advanced to treat a variety of types of cancers. It has been developed to target both PD-1 and CTLA-4 receptors.

What makes this drug a good candidate to advance into clinical testing is because of its tumor-selective T-cell activation, for starters. However, in vivo testing of the dual blockade of both PD-1 and CTLA-4 led to extensive T-cell proliferation and anti-tumor activity. Another focal point to highlight would be that such a clinical candidate was developed to eliminate FC gamma receptor binding. Why was it designed to do so? That's because it would possibly prevent/eliminate the depletion of T-cells engagement that occurs with FC gamma receptor binding. One of the strengths of vudalimab is its bispecific FC domain technology, which allows it to bind to two targets.

Financials

According to the 10-Q SEC Filing , Xencor had cash, cash equivalents, receivables and marketable debt securities of $531.4 million as of June 30, 2023. This biotech has been able to generate research revenue from several collaborations. In the second quarter ending June 30, 2023 it was able to generate research revenue of $45.5 billion, compared to only being able to obtain $30.2 million in the same time period the prior year. Such research revenue came from a second Janssen Biotech collaboration, royalty revenue from Alexion and milestone revenue from Zenas.

This company should have enough cash for an extended period of time. Why do I state that? That's because it expects to end 2023 with between $425 million and $475 million in cash, cash equivalents, receivables and marketable debt securities. It believes that it has enough cash on hand to fund its operations through the end of 2025.

Risk To Business

There are several risks that investors should be aware of before investing in this biotech. The first risk to consider would be with respect to the advancement of vudalimab for the treatment of patients with various types of cancer. As I stated above, it is advancing this drug targeting patients with metastatic castration-resistant prostate cancer [alone as a monotherapy and in combination with chemotherapy or PARP inhibitor]. It is also advancing the use of this drug in another mid-stage study targeting patients with gynecologic malignancies and genitourinary cancers.

Results from several of these cohorts using vudalimab alone or as a combination therapy for the treatment of these patient populations are going to be presented at a medical conference in early 2024. There is no guarantee that this drug alone and in combination with these other therapies will produce substantial results in one or more of these target indications.

A second risk to consider would then be with respect to the advancement of vudalimab for the treatment or first-line patients with locally advanced or metastatic non-small cell lung cancer. The use of this bi-specific antibody is going to be evaluated in combination with chemotherapy to treat these specific NSCLC patients. If and once this trial is initiated, there is no assurance that vudalimab will achieve a positive outcome with respect to this patient population.

A third risk to then consider would be with respect to the ongoing collaboration revenues that Xencor has in place with several companies such as Alexion Pharmaceuticals ( ALXN ), Amgen ( AMGN ), Zenas Biopharma Ltd. and others. In order for Xencor to continue to receive research revenues from these pharmaceutical companies, then its Xtend Fc technology will have to keep producing significant data. Such collaboration agreements could be terminated at any time, and thus this remains a huge risk to consider going forward.

Conclusion

Xencor has made significant progress in being able to advance several of its clinical candidate in its pipeline. I believe that it is in good shape to advance several of its technologies so that it can create shareholder value going forward. The types of technologies it deploys for use of its clinical pipeline candidates are XmAb Bispecific Fc Domain, Xtend Fc Domain, cytotoxic Fc Domain and immune inhibitor Fc Domain. Vudalimab makes use of both the bispecific and Xtend Fc domains. It targets both PD-1 and CTLA-4 proteins and has the potential to go after very large market opportunities, as I described above.

This drug is only the first of many bispecific drugs being deployed to treat a variety of types of cancer. It is already generating research revenues based on the partnerships established thus far, and additional Xencor, Inc. shareholder value can be created upon the release of vudalimab data expected at a medical conference in early 2024.

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