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Promising data in mesothelioma
We believe the data Targovax reported yesterday on its phase I/II clinical trial in mesothelioma for ONCOS-102 is promising, and warrants the company proceeding to a larger trial. The plan is to combine ONCOS-102 with standard-of-care chemotherapy and a CPI in a c100 patient phase IIb trial. We believe the data presented yesterday justifies a higher LOA for the indication; as a result we have increased the LOA from 10% to 20% for the indication. Given the higher success rate, we have raised our target price to NOK19 (7), and reiterate our BUY recommendation.
Mesothelioma data promising for ONCOS-102 . The company presented what we view as overall positive data in the mesothelioma indication yesterday, especially compared to historical data sets in this indication. The mPFS in first line patients treated with ONCOS-102 plus chemotherapy was 8.9 months compared to an mPFS of 6.8 months in the control group.
ORR paints an unclear picture . The ORR was more or less the same in the control arm and the experimental arm in first line patients, while it was higher in the control arm than in the experimental arm in second and later lines. However few patients in the control arm makes the data unreliable. Historically, there has also been a weaker correlation between ORR and mPFS in this indication than in many others, and the key end-point for the regulatory authorities will most likely be mPFS and OS, we believe.
Phase IIb trial in mesothelioma likely to start in a year’s time . We expect the company to initiate a phase IIb trial of c100 patients in two arms in early 2021. We estimate that such a trial would cost cNOK200m (assuming the company has access to a CPI through a partnership deal). The patients should be followed for at least two years. In our view it is not unreasonable to believe that such a trial could be upsized given good data, and ultimately become a registration trial (it cannot be a blinded trial).
Immune activation higher in experimental arm than in control arm . The average fold increase in infiltrating CD8+ T-cells was c3.3x higher in the experimental arm than in the control arm.
BUY recommendation maintained; target price raised to NOK19 . In light of the data, we have increased the LOA for ONCOS-102 in the mesothelial indication from 10% to 20%. As we believe there is a fair chance of the company signing a licensing deal based on the data, this increase in LOA also has a positive impact on our milestone forecasts.
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