On December 6, 2022 Chimeric reported that it has entered into an exclusive option agreement to license the clinically validated, off the shelf, robust, enhanced natural killer (CORE-NK) cell platform from Case Western Reserve University for the treatment of cancer (Press release, Chimeric Therapeutics, DEC 6, 2021, View Source [SID1234598461]). The CORE-NK platform was designed to overcome the hurdles associated with NK cell development and enables the production of large numbers of highly active universal donor NK cells that are active in the body. The company expects to rapidly move to complete full licensing of the platform.
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Improving NK cells
NK cells are naturally found within the body and are able to recognise and kill cancer cells, but efficacy when used in a therapeutic setting is often limited due to challenges in manufacturing enough of them to halt the growth of many cancers. CORE-NK cells are made by activating and expanding NK cells to make them more active and robust in large numbers.
Enabling an expansion of the pipeline
Besides using CORE-NK cells to target cancer directly, this licensure would allow for the creation of CAR-NK programs to augment the current CLTX CAR T and CDH17 CAR T programmes that are focused on solid tumours. Four new pipeline programmes are expected to be started in 2023 following the anticipated acquisition of the CORE-NK platform. Positive low dose CHM 1101 data from Phase I Data from the low dose cohort of four patients from the Phase I trial of CHM 1101 (CLTX CAR T) was presented in November at the Society for Neuro-Oncology (SNO) annual meeting. Three out of four patients achieved stable disease that was durable for five to eight weeks. In one patient, there was no evidence of progression in the part of the brain in which CHM 1101 was infused intratumourally and progression was only seen in an area of the brain where it was not infused intertumourally. Valuation: A$322m or $0.97 per share We have adjusted our valuation from A$327m or A$0.99 per share to A$322m or A$0.97 per basic share, mainly due to lower net cash. Because the CORE-NK platform is not fully licensed and its associated products are not yet in the clinic, we are not including them in our valuation yet, in accordance with Edison methodology. Once included, they may have a meaningful impact upon the valuation due to the size of the markets targeted by the company.
Chimeric Therapeutics Development update Acquiring an exciting new NK cell technology Price A$0.27 Market cap A$90m A$1.40/US$ Net cash (A$m) at 30 June 2021 17.4 Shares in issue 333.4m Free float 39.2% Code CHM Primary exchange ASX Secondary exchange N/A Share price performance % 1m 3m 12m Abs (13.3) (24.6) N/A Rel (local) (11.4) (21.8) N/A 52-week high/low A$0.39 A$0.24 Business description Chimeric Therapeutics is an oncology-focused Australian-based company that recently went public on the ASX. The lead programme is CHM 1101, currently in Phase I for the treatment of GBM. Beyond GBM, the technology may have applicability for other tumours such as melanoma. The company recently in-licensed a CDH17 CAR T for use in solid tumours and the CORE-NK platform, which may have broad applicability in cancer. Next events Updated CHM 1101 data CY22 CHM 2101 Phase I initiation CY22 Analysts Maxim Jacobs +1 646 653 7027 Jyoti Prakash +91 981 880 393 [email protected] Edison profile page Pharma & biotech Chimeric Therapeutics is a research client of Edison Investment Research Limited Chimeric Therapeutics | 6 December 2021 2 The CORE-NK platform Chimeric has announced that it has entered into an exclusive option agreement to license the CORE-NK platform from Case Western Reserve University. NK cells are found in the body naturally and are able to recognise and kill cancer cells without affecting healthy cells. They are also able to produce cytokines that use the immune system to mount an additional response to kill tumours.
However, efficacy when used in a therapeutic setting is often limited due to challenges in manufacturing enough of them to halt the growth of many cancers. Through the platform, CORENK cells are made by activating and expanding NK cells to make them more active and robust in large numbers. 1 The company expects to rapidly move to complete full licensing of the platform. Financial terms are likely to include development milestones, industry standard royalties (likely single digit in our view) and an upfront payment. The anticipated licensure would enable a significant expansion of the product pipeline past CHM 1101 and CHM 2101, the CLTX and CDH17 CAR T therapies, respectively, currently in development.
The company plans to develop CAR NK versions of both those programmes, develop therapies using the current and next generation CORE-NK platform and an additional CAR NK with an undisclosed target. CAR NK products would be made by inserting CARs into the CORE-NK platform cells. Adding the CARs improves the delivery of the NK cells to specific antigen-expressing tumours. Exhibit 1: Planned Chimeric pipeline post-CORE-NK licensure Programme Construct Type Indication focus Status CHM 1101 CLTX CAR T Autologous Glioblastoma multiforme (GBM), melanoma, colorectal, prostate Phase I ongoing in GBM, second trial in another indication planned for 2022 CHM 2101 CDH17 CAR T Autologous Neuroendocrine, colorectal, pancreatic, gastric Phase I expected 2022 CHM 0201 CORE-NK Platform Allogeneic Both hematologic and solid tumours Phase I complete (9 patients completed all three dose levels with data expected in 2022), further technological enhancements planned for development as combination therapy CHM 0301 Next Generation CORE-NK platform Allogeneic Hematologic tumours Phase I planned 2023 CHM 1301 CLTX CAR-NK Allogeneic Glioblastoma multiforme (GBM), melanoma, colorectal, prostate Phase I planned 2023 CHM 2301 CDH17 CAR-NK Allogeneic Neuroendocrine, colorectal, pancreatic, gastric Phase I planned 2023 CHM 3301 Undisclosed CAR-NK Allogeneic Undisclosed Phase I planned 2023 Source: Chimeric Therapeutics As NK cells are not thought to cause graft-versus-host-disease (GVHD), all these CORE-NK based therapies have the potential to be allogeneic, where cells from a single donor could be used to treat multiple patients.
This is in contrast to autologous therapies where treatments are based on a patient’s own cells. Allogeneic therapies hold the promise of starting with healthier material, lowering manufacturing costs and being rapidly available to patients (the bespoke nature of autologous treatments can delay treatment for weeks). Besides these announced programmes, Chimeric will be seeking additional collaboration and licensing opportunities for the platform. CHM 1101 data from the low-dose cohort At the SNO conference in November, data from the CHM 1101 Phase I was presented. The data focused the four patients who were enrolled at the lowest dose level of 44m CLTX CAR T cells 1 Ojo et al., Membrane bound IL-21 based NK cell feeder cells drive robust expansion and metabolic activation of NK cells. Scientific Reports 2019 Oct 17;9(1):14916. Chimeric Therapeutics | 6 December 2021 3 (which were injected intratumourally in a single injection). Stable disease was achieved in three out of the four patients with durability of five to eight weeks. Importantly, in one patient, there was no observed tumour recurrence in the left frontal lobe where the CLTX CAR T cells were administered.
Tumour progression in that patient occurred in the left temporal lobe, which did not receive the infusion. Also, with regards to safety, therapy was generally well tolerated and there were no cytokine release syndrome (CRS) events due to therapy. Dose escalation is planned across four dose levels up to 440m cells through dual intratumoural and intraventricular routes of administration (intraventricular administration only starts at the 88m cell dose level). Valuation We have adjusted our valuation from A$327m or A$0.99 per share to A$322m or A$0.97 per basic share, mainly due to lower net cash. Because the CORE-NK platform is not fully licensed and its associated products are not yet in the clinic, we are not including them in our valuation yet, in accordance with Edison methodology. Once included, they may have a meaningful impact upon the valuation due to the size of the markets targeted by the companyFinancials In the quarterly cash flow report for the first quarter of FY22 (the period ending 30 September 2021), Chimeric reported A$17.4m in cash at Q122.
In FY21 the company had an operating loss of A$15.1m. We have not made any meaningful changes to our financial model following these results and have introduced FY23 estimates, which feature A$14.5m in operating expenses. We may increase our R&D expense estimates once we have more clarity on the clinical programme post the closure of the licensing of the CORE-NK platform. We continue to project a financing need of A$80m through 2026, with A$20m expected to be raised in FY22 and modelled as illustrative debt.