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An Intriguing Play In Immune-Oncology For Summer 2019

Last Updated on June 15, 2019 by Sultan Beardsley

Happy Friday everyone! The end of the Q2 is nearly upon us (June 30th). Going into the 2nd half of the year I want to present for our members up and coming companies on the path to success. In my last article, I argued if a company has a competent management team, an efficacious product, and ample funding, they should succeed. Relationships with big pharma is icing on the cake. The following company is on track to obtain these qualities once its data matures.

Marker Therapeutics (Nasdaq: MRKR) is an immuno-oncology (I-O) company developing an innovated cell-based therapy for hematological malignancies (blood cancers) and solid tumors. After a merger with Tapimmune in 2018 MRKR added two cancer vaccines, TPIV200 and TPIV100, to its portfolio. I-O is a rapidly evolving and growing arm of the cancer treatment-sphere. In 2018 it was valued at $57 million globally and is expected to grow to $173 billion by 2026. Chimeric antigen receptor T-cell (CAR-T) and T-cell receptor (TCR) are two such treatments, and MRKR is gunning for them.

CAR-T and TCR therapies involve harvesting T-cells from a patient, genetically engineering them, and infusing them back into the patient. In short, T-cells are warriors of the immune system and as such hunt down and kill cancerous cells. Through modification, T-cells are retrained to seek out specific receptors on the surface of cancer cells. While effective, there are serious risks and drawbacks including patient death due to toxicity, high production costs, and narrow targeting capabilities.

Next Generation CAR-T

Clinical data generated by MRKR in lymphoma (blood cancer) suggests their proprietary Multi Antigen Target T-Cell Therapies (MultiTAA) has disruptive potential. Instead of culturing a single breed of T-cells, the MultiTAA technology facilitates scalable production of a heterogeneous mixture of non-genetically engineered T-cells. By targeting several tumor-targets it decreases the chance of “tumor-escape” where cancerous cells missing the targeted receptor evade execution. Thus, the durability of patient response rates stands to increase markedly (i.e. patients live longer before relapsing, or do not relapse at all). On top of that, because there is no genetic modifications involved, MultiTAA is less toxic and more cost effective than existing CAR-T and TCR approaches.

The T-cells are manufactured using “G-REX” cell-culturing technology which was pioneered by MRKR board member Dr. Juan Vera (for a brief video about the G-REX click here). G-REX uses a single-use disposable FDA registered Class 1 device that creates a high density culture that can sit an incubator and get nutrients and oxygen on demand.  When the cells are ready, the media is withdrawn for processing.

The end product is the Multi TAA cell therapy. In contrast to CAR-T technology, Multi TAA can pick up rare clones of T-Cells in the ratios of 4000:1 and expand them.  No attempt is made to interfere or genetically modify the peptides from the original culture.  It’s simply a natural T-Cell expansion.  What is so different versus traditional CAR-T therapy is that the mix also includes central & effector memory markers for immediate anti-tumor & long lasting persistence.  The cost of this therapy is estimated to be $8,000 per patient and that includes cells frozen for follow up treatment.  In contrast, the cost for Kite Pharma is $100,000 per patient.  Both treatments take about 30 days to administer.

Multi-TAA Therapy Efficacy

Conventional wisdom and the FDA regulatory process has positioned Kite Pharma at the head of the pack of CAR-T therapies.  So a great way to measure up is a head to head comparison to Kite Pharma’s lead candidate Yescarta.  The figure below depicts the comparison and shows a relatively identical initial response rate, but a more durable response when you look at how long the therapy can stay in remission without a relapse.  Although the data set is small, the durability of the complete responses is something to get very excited about.  In order to understand the graph below investors need to understand the terminology.

  • CR = Complete Response – 100% Tumor Shrinkage
  • OR= Objective Response – Sum of Stable Disease and Partial Response
  • PR= Partial Response- At least 50% Tumor Shrinkage
  • SD= Stable Disease – Between – 0 -29% Tumor Shrinkage
  • PD= Progressive Disease – 1 – 20% Increase in Tumor

Starting with the Kite data, turn your attention to the Green Line labeled CR and the Amber line labeled PR.  This chart is a graph of the responders.  In the first month all 101 Kite patients had a complete response or a partial response.  For about 2-months the complete responders were doing fine and then they started to relapse.  The complete responders on KITE therapy saw a gradual erosion until it plateaued at the 11 month point with a 68% reduction in tumors.  54% of the responding patients on Kites therapy were able to maintain the 68% tumor reduction for about 2 years.  The partial responders did well for a month and then saw a steep dive in the rate of relapse from month 1 to month 2 and plateaued out at a 10% reduction in tumor growth.

In comparison Marker’s study has only 11 evaluable patients, but the strength of the response can be seen in the durability of the response.  Six patients on the Marker TAPP therapy had a complete response well the kept it and didn’t have any relapse for over 2 years.  One patient was 4 years!  The other 5 patients in the study maintained a response for 5 months.  That means in the Marker trial all 11 patients maintained a complete response for 5 months versus only 1 month for KITE.  Ultimately, 5 patients ended up with stable disease at around 25% tumor shrinkage for 15 months.  When comparing the two data sets the ideal situation or the best possible outcome is represented by the red line.  The red line is well above the Green KITE line indicating it is a more durable response.  That means the likelihood of a relapse with Markers therapy is very low.  With more data Markers purple stable disease line is going to be more smooth but still higher than Kite’s amber line.  On both measures Marker’s therapy trumps Kite’s, albeit the patient population was much smaller.

The bottom of the slide looks at Serious Adverse Events (SAE’s).  Market had 57 in the study versus 101 for Kite so the safety data is very relevant.  95% of KITES patients see grade 3 SAE’s including neutropenia and thrombosis and anemia versus zero for Marker.  The levels of neurotoxicity is very concerning because it leads to brain swelling that really can’t be treated.  28% of Kite patients experienced this.  Furthermore it suggests that this would not be a very good therapy for brain cancer.  Marker did have one SAE but the patient still responded and is now 11 months into remission.  In the AML disease SAE’s don’t translate into a response so this was a rare instance that in spite of side effect the therapy still worked.  The safety profile of Markers MultiTAA therapy seems to be generations ahead of the pack.  While the slide represents a small subset of data of an ongoing trial, the trend data allows interpolation of the results which indicate that not only does Marker’s therapy work but it could emerge superior to Kite Pharma’s Yescarta.

Data From Triple Negative Breast Cancer

Earlier this year interim phase 2 data in in triple negative breast cancer was reported. Here TPIV200, a folate receptor-alpha peptide vaccine, was used as a maintenance therapy for patients classified as in remission subsequent to first-line therapy. 96% of the evaluable individuals (26/27) in this 4-arm study demonstrated significant immune responses. Out of the 80 total patients within the trial 11 have progressed (i.e. tumors have grown). TPIV200 is also being explored in phase 2 as a treatment for ovarian cancer.

Milestones Expected In the 2H19

1- Interim phase 1/2 data in pancreatic cancer 3Q19.

2- First update on ongoing solid tumor clinical trials 3Q19.

3- Submitting an investigational new drug application (IND) for a company sponsored Phase 2 clinical trial in Acute Myeloid Leukemia (AML) in 3Q19. Phase 1 data was discussed in the above comparison with Kite Pharma. The first patient should be dosed by the end of the year.

4- Interim phase 2 of TPIV200 as a maintenance treatment for patients with ovarian cancer who are in their first remission. The study completed enrollment in January 2019. The interim-analysis is triggered by disease progression of 55 patients. Data is expected to be reported in 4Q19.

5. An overall update on MRKR’s cell therapy programs is expected by the end of the year.


With $58 million in cash and a burn rate of only $5.7 million 1Q19 MRKR is in a strong financial position (view latest 10-Q here). Moreover, total liabilities was only $3.4 million as of March 31st, 2019. In light of the fact that they have 14-ongoing clinical studies, with more underway, I’d say that is an impressive feat. How do they do it?- Through collaborating with high caliber institutions such as the Baylor College of Medicine (BCM), the Mayo Clinic, and the Department of Defense (DoD). As of now the only trial sponsored by MRKR is a phase 2 study in ovarian cancer. As the pipeline progresses, though, I imagine more of the financial burden will fall on MRKR. If not, it begs the question: What commercial rights and or autonomy must they concede?

Under current cash flow conditions MRKR should not need to raise money until 3Q20. Furthermore, the company has only 25.5 million shares float out of 45.58 million outstanding. With stats like that it comes as no surprise that there is high insider and institutional ownership (32% and 43%, respectfully). Of note, Perceptive Advisors, which as we know is reputed as a successful biotech firm, and the a largest institutional investor of ADMA Biologics (ADMA), owns 4%. Baker Bros, another respected investment firm, owns 3%.

Investment Summary

MRKR is well positioned to emerge as a leader in the I-O arena. Using their novel MultiTAA technology MRKR could potentially set a new standard that trumps existing CAR-T and TCR therapies. For now, though, its too early to say with certainty. More mature clinical data in a larger patient population expected 3Q19 this year will shed light onto the significance of the exciting phase 1 data discussed earlier. MRKR’s accomplishments thus far, and their business strategy, bodes well for management.

By collaborating with medical and governmental institutions MRKR has been able to glide through the early clinical-stages with minimal financial strain. Although, at what intellectual property cost remains unknown. Nonetheless, the company has also expressed an interest in licensing out its proprietary PolyStart™ platform; a DNA-based technology that increases vaccine potency. That would open the door to another revenue stream hedging against the risk of set-backs in other programs.

From a technical stand-point, MRKR bounced off support ~$5.30 on June 4th. Since then, its moved jaggedly, as expected with a low float stock, but overall in an upward trajectory. Its important that we think about the underlying reason for macro-trends in anticipating emerging price action. In April, there was a prolonged sell-off; probably linked to the “Medicare for all” rhetoric making headlines at the time. I am surprised to see ~50% recovery in May during a resurgence in trade drama. Since June, the uptrend took another leg up approaching pre-April levels. Based on everything discussed, the trend should continue into July where we expect to see critical data readouts. If it does pullback, I expect the share price to hold above $6.0. If it breaks, we are likely to revisit the $5.50-5.80 range.

MRKR holds a lot of promise and the price is attractive considering where it could be if the interim phase 2 AML data is on par with phase 1 results. Of course, if the inverse unfolds, the market will punish MRKR and drive the price lower. I plan to build a modest position at these levels. Today (June 14th) a Form S-3 was released after market hours; the market may react negatively to this on Monday. If so, I think it makes for a great entry opportunity for new investors. A potentially obscure risk I want to mention is the G-20 summit June 28th-29th. New development on trade between the U.S and China could emerge sending the markets back into a spiral.

I have no position in any company discussed in this article, but i may initiate one in MRKR next week. I was not compensated to write this.

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