2023-07-07 17:55:10 ET
Summary
- IMRX is an early-stage company with promising science.
- They do not have clinical efficacy data.
- While I like the company, be warned that this is going to take time.
Two years ago, I covered Immuneering Corp ( IMRX ), then a preclinical stage under-the-radar cancer therapy developer which had recently IPO-ed. The company is still quite under-the-radar, but since two years have passed since the IPO, and they recently produced positive phase 1 data from lead asset IMM-1-104 in RAS mutant solid tumors, it is time to take another look at IMRX.
MY 2021 article was a skim-the-surface review, written at a time when they had no clinical data, so I did not really have much to cover. I wrote then that the company's expertise in translational bioinformatics has been used and acknowledged by a number of major pharma companies like Janssen, BMS and Teva for some of their major blockbuster drugs. This is the same platform they are using to develop their drugs. IMRX was formed in 2008, and spent the next decade in laboratory work, discovery, and research. In 2018, they started developing a wholly-owned pipeline of orally administered small molecule drug programs. The goal is to use traditional pathways like RAS, MEK, etc., but reduce toxicity.
In September, the FDA cleared their first IND, for lead candidate IMM-1-104 in RAS mutant solid tumors. The company started a phase 1/2a trial for this once daily oral therapy, in sites across the US. The phase 1 safety, pk/pd trial will be followed by a dose escalation trial in RAS mutated pancreatic, melanoma, colorectal, and lung cancers.
In April, the company presented data from the phase 1 portion. Data showed:
-
IMM-1-104 well tolerated with no dose limiting toxicities (DLTs) or serious adverse events (SAEs) observed.
-
First demonstration of novel deep cyclic inhibition mechanism in humans, with IMM-1-104 achieving significant levels of PK Cmax and a half-life of approximately two hours as predicted.
-
Pharmacodynamic data support potential to evaluate preliminary efficacy sooner than expected.
These are the sorts of data where the negative is predictive, but the positive isn't at all predictive. That means, if the safety data was problematic, the trial wouldn't have proceeded further at all. But just because it is positive and the trial proceeds does not mean the trial will be a success overall, because there is no human efficacy data yet.
On the other hand, the data is indicative - it showed the high selectivity of IMM-1-104, and that it could reach maximum concentration quickly, and then be removed from the body equally quickly. As the company noted , "prior therapies have often suffered from steep increases in drug half-life in humans when compared to preclinical models." This has not happened here; IMM-1-104 has maintained a short half-life in line with preclinical models, and this will, hopefully, enable it to avoid toxicities associated with competing molecules, while the quick Cmax will enable higher doses in the dose escalation phase, allowing the molecule to safely attain therapeutic levels of concentration. Since the disease is cancer and not a chronic disease which requires regular medication, a shorter half-life profile is preferred. As the company noted :
…our approach aims for every day to be a drug holiday for the healthy cells, and every day to be judgment day for the tumor.
A discussion of the scientific thinking behind the approach is available in their earnings call, which, as they put it, is their first earnings call in 15 years. The idea is exciting. Their first goal is to develop working cancer medicines that do not cause as much harm, i.e., which have a high therapeutic index. This is the ratio between the blood concentration of a drug at which it becomes toxic, and the one at which it becomes effective. When this is high, i.e., the numerator is much higher than the denominator, it takes less drug to become effective, but a lot more drug to become toxic. The second goal is to make the drug truly agnostic to specific RAS mutations while leaving wild type RAS alone. This is effected through the idea that cancer cells are always on, or are always using the MAPK pathway, while healthy cells use it less intermittently. This idea enables the molecule to target cancer cells with a high selectivity, while targeting all cancer cells harboring nearly every RAS mutation.
The idea has been tested preclinically, and this data was presented at the AACR, as well. They tested 75 RAS models, and "64 of the 75 models tested, or approximately 85% did respond. And at least one model displayed response to IMM-1-104 for each observed RAS mutation, regardless of the mutation position, or amino acid substitution."
So far so good, but like I said, I have learned from experience not to gamble too much on preclinical or early clinical data. That's the conservative investor in me. So I am going to see a lot more human efficacy data before I am willing to bet on IMRX. From the timeline they have shared, I believe we will have to wait until 2025 to see such data.
Financials
IMRX has a market cap of $234mn and a cash balance of $105mn. They recently put their neuro programs on hold to preserve cash for their onco program. R&D expenses for the first quarter ended 2023, were $10.2 million, while G&A expenses were $4.5 million. That gives them a cash runway for around 8 quarters, or well into 2025, ignoring, of course, higher future expenses for later-stage trials.
The company has a healthy mix of retail and smart money investors. Top holder is Cormoran, followed by the CEO himself, and T Rowe Price. That is a very good mix. Insiders have been regularly buying stock, and have not sold any in the past 2 years - another robust indication.
Risks
There are very few company-specific risks here, except perhaps the cash position. I wish they had more cash, but their spends are also low. Apart from cash - and the low trading volume - I can't identify any company-specific risks here. Yes they are early stage, and they are nanocap, and those things always have risks.
My thesis for this company is based mostly on the science and preclinical data, which is not always a convincing metric. Often, what is seen in the lab changes vastly in human trials, so these trials could fail, which will destroy the company, and more importantly, your investment.
Their cash position is low, so there is always a risk of dilution. Their expenses are on the lower side as well, however, nearing commercialisation, they will need a lot more cash. Investors should hope that the eventual dilution will be after strong data, which will push the stock up.
The low trading volume is a worry as well. This not only shows low market interest in the stock, but also makes it difficult for investors to execute trades, and enter or exit the stock at the price they want. Moreover, effects of large transactions from smart money may have major swings, more than they would impact a stock with a larger trading volume.
Bottom Line
I like IMRX as much as I can "like" early-stage companies. They have every indication of future greatness. Just for taking a pilot position, I may actually buy a very, very small stake in this company at current prices, which happen to be midway between its yearly high and low. But I don't expect anything before late 2024 at the least.
For further details see:
Immuneering Corp.: Early Stage Promise, But Long-Term Investment