NewLink Genetics Corp (NASDAQ:NLNK) Targets Billion Dollar Oncology Indication With Topline

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On the Friday close at the end of last week, NewLink Genetics Corp (NASDAQ:NLNK) reported its first quarter 2016 financials. Alongside the financials, the company gave us an update as to the progress of its development pipeline, and specifically, it’s pivotal pancreatic cancer trial. Final analysis is set for the next couple of weeks, and NewLink  expects to report topline before the close of the second quarter. In anticipation of this data, here is a look at the drug in development, and a discussion of what we should be looking for when topline hits markets.

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The drug in question is called Algenpantucel-L. It’s part of a subsector of immuno-oncology called hyper acute immunotherapy. The science behind the treatment is relatively simple to explain. The company has produced a large number of genetically modified pancreatic cancer cells, which express a carbohydrate called alpha-gal. Patients undergoing therapy receive these cells as a subcutaneous injection (they have been treated with radiotherapy to inhibit any further growth) and upon immediate recognition, the patient’s immune system attacks and processes the alpha gal expressing cells. On processing, the immune system becomes trained to recognize any host cancer cells that also express alpha gal (such as those associated with pancreatic cancer tumors). As a result of this training, a patient’s own immune system – or at least, NewLink hypothesizes, and is attempting to show in the phase III in question – targets and kills cancerous cells.

The phase III is called IMPRESS (Immunotherapy for Pancreatic Resectable Cancer Survival Study). It is structured investigate the impact of including Algenpantucel-L as part of a treatment regimen for patients who have undergone surgery to remove pancreatic cancer, compared to standard adjuvant therapy – in this instance, Gemcitabine. In other words, and to simplify, the trial is asking the following question: does a combination of Algenpantucel-L and Gemcitabine work better than just the latter? Primary endpoint is overall survival, and secondary endpoint is disease-free survival, across a 722 patient population.

What are we looking for from the trial as an indication that the drug is effective, and in turn, stands a good chance of FDA approval?

In a phase II that tested the drug in combination with an SOC adjuvant, NewLink demonstrated disease-free survival of 62% and overall one-year survival at 86%. The company also demonstrated median overall survival at 35.8 months in patients with elevated levels of anti-CALR Ab, versus 19.2 months in patients without elevated levels. Anti-CALR Ab levels correlate with Algenpantucel-L treatment, so this essentially means that the patients who demonstrated a response are those with the higher level of overall survival.

In the upcoming topline release from the pivotal trial, we are looking for a replication, or ideally, a building upon, these results. Specifically, if the IMPRESS trial gives us an overall survival level of anywhere near 35 months, we would consider this an endpoint hit, and in turn, view the data as positive for the group’s chances of gaining an FDA approval come NDA submission.

What about the market potential? The pancreatic cancer space is forecast to be worth around $1.63 billion during 2017,  and if NewLink Can bring its treatment to market, the potential revenues to be had likely correlate with the size of the market. By this, we mean that the treatment will run alongside current standard of care, so it’s target population is roughly equal to that of the pancreatic cancer space as a whole. Of course, NewLink will initially only be targeting the resectable side of the space. That is, those patients who undergo surgery to remove all or part of their pancreatic cancer tumors. It is a reasonable assumption, however, that if the drug becomes established in this resectable space, the company will target an extension of its approved indication to those patients who are undergoing a course of chemotherapy and haven’t undergone surgery.

What’s the takeaway? Pancreatic cancer is a big market, and is growing fast. Those drugs that are currently standard of care treatments stand to generate multibillion-dollar revenues across the next five years, and NewLink is aiming not to compete with these revenues, but to bring a drug to market that supports the underpinning treatments that generate them. With this in mind, the company could be targeting a billion-dollar market before the closing of next year, if all goes well in the upcoming topline release. One to watch.

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