Immunotherapy is the future of cancer treatment and TapImmune has been leading the charge. CEO Glynn Wilson discusses the advances made in the ovarian and breast cancer. The company is taking a vaccine approach to reduce recurrence of cancer and to improve progression free survival and in some cases to treat cancers that couldn’t otherwise be treated. Brett Johnson: What does TapImmune do? What is your mission? Glynn Wilson: TapImmune is an immuno-oncology company focusing on women’s cancers. The aim of the company is to broadly activate T-cells to recognize and kill specific cancer targets in addition to improving antigen presentation. BJ: Why is that important? The antigen presentation? GW: That’s how the company got started. It was looking at TAP a transporter associated with antigen presentation which can be shut down in a variety of different cancers. Some early observations showed that you could modulate antigen presentation and get the cancer seen by the immune system. It’s still important part of what we do but it was put to lower down in our priority list when we looked at the development plans. BJ: So what is the core idea in innovation of TapImmune? GW: The core idea is to use antigens either as peptides or through nucleic acid expression and to get them naturally processed by antigen presenting cells to present the target to the T-cells and broadly stimulate them. That means stimulating both the CD4 cells and the CD8 cells. We have both technologies, both peptides, that are in the clinic and we have a new nucleic acid technology called PolyStart which we are very excited about. BJ: How is that different now from what other companies are doing in the field? GW: There are a number of companies doing some of these things. I think our focus on women’s cancer is key because women’s cancer, whether it’s ovarian or triple negative breast, they’re not natural targets for immunotherapy, such as the check point inhibitors. They’re good targets for vaccines because most of the patients that we are looking at have a high rate of recurrence after front line treatments. There’s a natural intervention point when you can come in with a vaccine approach to reduce recurrence of cancer and to improve progression free survival and in some cases to treat cancers that can’t otherwise be treated. One of the key things we did at the beginning in selecting what’s currently in the clinic was to make sure that we focused on broadly stimulating the T-cell system. Initial work in this field focused exclusively on CD8 cells and killer cells. We now know that you can’t get a viable and long lasting CD8 response without having a CD4 response stimulating helper cells. So we’ve done both of those BJ: Could you talk about the regulatory pathway and where the company is at the moment GW: Our lead products are in multiple phase 2 programs. One of them has FDA fast track for Ovarian as a maintenance therapy. If you look at the regulatory pathway, that’s probably the closest to getting approval if results are good because we have the opportunity to go to the FDA anytime with data and discuss it. We’ve got a number of INDs. We are looking at phase 2 starting to read out this year. We’ll have two interim sets of results. One in ovarian cancer and one in our Triple Negative breast cancer program. Those programs won’t be completed until the end of 2018. Those are small open label studies. One of the bigger studies starting at the Mayo Clinics is a 280 patient study that won’t read out for at least 5 years. The pathway, I think is so far, so good. We’ve had good interactions with the FDA. The products we have in the clinic don’t have any real safety issues. They are well tolerated and safe. If we see good results with the ovarian cancer at phase 2 with the fast track program, you know, we have potential for that approval after phase 2. In immunotherapy, if you look the work companies like Merck has done recently with their checkpoint inhibitors, if they can show good signals, they’ve been able to get approval within seven years from starting the clinical programs. BJ: Just remind me again about the phase 2 results coming out this year? GW: We’ll have interim analysis on two Phase II studies. That will be in the fourth quarter this year. The first study that we will be reading out on is one that we are actually doing in collaboration with Memorial Sloan Kettering and AstraZeneca and we are combining what we call our folate receptor alpha vaccine, what we call TPIV 200 with a check point inhibitor durvalumab. We’re doing that in patients that are ovarian cancer patients that have become platinum resistant and who don’t have any other therapies. That’s a 40 patient study with more than 50% recruited. After that we needed to hold the study, look at the results and decide what to do next. So that’ll be coming out in September. It’s a fact of life now in immunotherapy, particularly the work of Merck’s check point inhibitors, they’ve been doing very small trials just for proof of concept. Just really to get you to the next trial to ask the question, “Does this give a signal?” and if so, what to do next. BJ: It’s impressive to get a fast track designation from the FDA. Maybe you could give us a little color of how you got that GW: The fast track is given for specific clinical indication where there is a huge clinical need. In our case it was for ovarian cancer patients that are actually responding to platinum but it is inevitable that they will become resistant at some stage. So what we are doing is adding the vaccine after the last dose of platinum therapy, where they have been responsive, but to look at how we can maintain that therapy by adding a vaccine in. It’s a nice clinical trial because the regular pathway to standard of care is a good one. BJ: What the cost of getting the platinum, how much platinum does a patient need? GW: Well, they traditionally get around 4 to 5 rounds of platinum therapy when observed and then the question is, “What does the oncologist do next?” They are certainly going to get two cycles of chemo, at least, of the platinum. It is currently standard of care in ovarian cancer. BJ: Can you tell us a bit about the market size for this? how big is this problem you guys are going after? GW: I think a good starting point is we are looking at ovarian cancer and triple negative breast cancer and we are looking at Her2/neu breast cancer. Her2/neu is the easiest to define because the frontline product out there is Herceptin which can only effectively treat about 20% of the patients that show the Her2/neu antigen. It’s a $6 billion per year product. I think that is probably the best indicator of the market. There are about 220,000 new patients that are shown to be Her2/neu positive per year. The triple negative breast cancer space is smaller. It’s about 40,000 new patients a year. And the ovarian cancer market is about 30,000 new patients a year. These are US numbers. Very large markets. In particular, with Triple Negative and ovarian, there are very few effective therapies so there is a great need. BJ: Major emerging trends in immunotherapy and immuno-oncology is combination therapy. Can you comment? GW: The check point inhibitors Opdivo (Bristol-Myers Squibb) and Keytruda (Merck) have a lot of press and are showing some great results but there’s still a need to treat more patients. The average effectiveness response rate from the Checkpoint Inhibitors is about 20-25%. In some cases, like metastatic melanoma, the results can be a bit better. It can go up to 40%. But the reality is that if you look at this space, you need to add other things and a vaccine is a natural medication because checkpoint inhibitors work because they take the breaks off the immune system and allow the immune system to see these cells. What we are using as a target is folate receptor alpha that is present on the majority of tumor cells, such as ovarian. Around 90% of those show greatly increased levels of folate receptor alpha. There’s a large market. There’s a huge need and also, in the case of ovarian and breast, the way the cancers play out, they’re a natural intervention point for vaccines. We’re not going for large, solid tumors. We’re going for tumors that have been treated and are maybe even in remission. We can maintain that and prevent recurrence. In the case of triple negative breast cancer, the only therapy after surgery and radiation is chemotherapy. Once patients relapse, they have to have more chemotherapy and so you find people having multiple relapses. Every time they do the prognosis becomes worse. The same is true for ovarian. After platinum therapy, the average time to relapse is about 6 months. BJ: What percentage of people actually relapse? GW: In ovarian cancer, it’s in the range of 50-60%. It’s a very high number BJ: So, in theory, all of these patients would want your treatment? GW: There’s a debate going on now about traditional method of looking at these patients is to look at progression free survival but the question is how well does that predict overall survival? We have to, in our clinical trials, make sure that we go out a long period of time, which we actually did with our phase 1 data. We went out almost 2 years after the vaccine treatment and we intend to publish these results soon. BJ: Getting back to the opportunity, could you state what the metric for opportunity is for your product? GW: If you take the Her2/neu example and add on the Triple Negative and ovarian, you’re talking about multibillion dollar markets. The predictions or the immunotherapy market is huge now, $50-$60 billion by 2020, in some circles. We have a great opportunity. Market predictions are always dangerous, as you know. They are large markets. In comparison to some cancers, e.g. melanoma the market for ovarian and triple-negative breast are not overcrowded. BJ: What is the current cost for some of these treatments? What are people paying for these other current treatments that you would be coming in behind. What’s the economics of this business? GW: It’s what the market can bear, essentially. I’m not sure of the cost for Herceptin but over the course of the treatment, which is a year, it’ probably around $200,000. One of the things that we know already is that we have a product in the bottle for reconstitution for simple intradermal dermal injection. Our manufacturing margins are going to be well over 80% just like many of the pharmaceutical products. We’re going to have a good cost basis for what we do in the future. BJ: Intellectual Property. So the IP scenario is using antigens that are unique to those cancers as well as nucleic acids unique to those cancers or is a question of using a combination of materials to protect the composition of matter for the technology? GW: It’s a little bit of all of those in terms of the peptide vaccines. The lead product has issued patents on composition and use. So the composition has a variety of different peptides discovered in patients. Not discovered in animals but discovered in looking at the immune system of patients and what they were looking at to see what they were responding to. That’s one aspect of it. The other aspect is that PolyStart has a unique composition of matter for a vector that can be used for multiple different antigens. The IP strategy is to continually add the antigens. We have a core composition that was approved last year and we had and antigen composition for Her2neu breast cancer that was issued 2 months ago. We’re doing well with that. BJ: Can you tell us more about the PolyStart? It’s probably an acronym and I think more individuals won’t know what that is. GW: Right. One of the issues with DNA vaccines is the potency and so what PolyStart does is it uses alternative codons for initiation. So instead of having AUG, you have at least 3 CUGs. You get one DNA that makes one RNA makes one protein, normally, but in the case of PolyStart you can get one DNA, one RNA and at least 4, probably a lot more proteins, produced. You get a much better signal. We can combine that initiation cassette with what we call a poly antigen array cassette which can mix and match antigens. It can be used for not only cancer but viral diseases too. BJ: Do you want to talk about your relationship with the Mayo Clinic and why that is important? GW: It goes back to the start of the company when I was looking at technologies that were already in the company but didn’t really have a clear development pathway or a clear clinical pathway. I started looking for technologies in the same space that had a good clinical pathway and I was able to link up and start this relationship with the Mayo Clinic and a very significant one. Our phase 1 studies for two vaccines were done at the Mayo Clinic in Rochester and now we are working closely with the Mayo Clinic in Jacksonville. In addition to that, our collaborators at the Mayo Clinic have been able to persuade the U.S. Department of Defense to put in almost $18 million to fully fund two phase 2 programs. One in Triple Negative breast cancer they provided a grant to the Mayo Clinic for $13.3 million and the most recent one for DCIS, they provided a grant to the Mayo Clinic for almost $4 million. The important thing for me was to have the due diligence done by the Department of Defense. They brought a number of experts in the breast cancer space to review our program. That leads to better and non-dilutive funding for the company’s programs. BJ: Do you have other collaborations? GW: The other collaboration that is important is the one that we did at Memorial Sloan Kettering in New York. We have a pharmaceutical collaborator that is there, AstraZeneca, for the checkpoint inhibitor. The important thing there was that our phase 1 studies in the background to vaccine development went through the global clinical team in AstraZeneca in the UK. They came back and wanted to do the study with us at Memorial Sloan Kettering. For the economics of that study, we provide our vaccine and pay half the cost and they provide their checkpoint inhibitors and pay half the cost. I think we have some significant collaborations, all of which have really turned over the rocks in our programs and looked into the background of what we are doing. The $13.3 million put in by the U.S. Department of Defense was one of the larger grants they’ve given out for breast cancer. One interesting study that we just recently announced is one on something called ductile carcinoma in-situ, DCIS breast cancer. It’s the area stage where women feel a lump and eventually they will get a lumpectomy. In many of those patients, the lumps are still confined to the duct of the breast. They get surgery. They get radiation and perhaps chemotherapy. Years later, some of those people will develop breast cancer. In a study that’s going to be done at the Mayo Clinic in Florida, we are looking at giving the vaccine to those patients ahead of surgery. The reason for that is we can actually look at the effect of the vaccine on the lesions in the breast to see the effects of the immune response on treating lesions. It’s a very exciting study. It’s one that is funded totally by, believe it or not, the U.S. Department of Defense. BJ: Could talk a little bit about the history and the origins of the company GW: The Company started out as a company called GeneMax. It was a spinout from a laboratory at the University of British Columbia, that was working on a transporter called TAP, a transporter associated with antigen processing. That was ten or eleven years ago. The results in animals were very impressive. You could replace the transporter that was switched off in a variety of cancers and get the immune system to then recognize the cancer and start to kill it. The science was exciting but the company was really didn’t have a development path way and didn’t really have a good pathway for financing itself. BJ: And how did you get involved? GW: I agreed to go on the board. We raised a small amount of money to start focusing on development pathways. I did the deal with the Mayo Clinic and eventually moved the company down to Seattle which was a much better area for the immunotherapy space with proximity to the Fred Hutch Cancer Center. From there, we started to build up the program and look at this whole area. I went out and talked to a lot of people, at that time, about the emerging immunotherapy and immune-oncology space and realized that this was a really exciting area for the future. At the time, we licensed the technologies from the Mayo Clinic or had the option to. They were ready to go into Phase 1, which we supported, and raised enough money to do that. If you look at seven or eight years ago, it was just emerging that you needed to stimulate the CD4 T-cell side of the immune system to be able to get a good immune response. Now that we are in the clinic at Phase 2, I think the field has essentially caught up to what we are doing. There is much more evidence now that, unlike the past attempts, you need to have broadly stimulated T-cells, both CD4 and CD8. I moved the company on and got two Phase 1’s completed and looked for combination approaches. Hence the Collaboration with Memorial Sloan Kettering. I, initially, joined the board because they needed somebody with my experience and I started running the company. It wasn’t my initial aim but it happened. BJ: That was around 2008-2009 that you joined? When did you take over? GW: It was shortly after. In contrast to the initial management that came in with new funding the Company really needed pharmaceutical development expertise. My background is from big pharma biotech companies with an emphasis on product development. I was able to look at this and start planning the clinical program and what we needed to do in technology development. When we moved the company from Vancouver to Seattle, that’s when we had our own labs and from that came the current PolyStart technology which is very exciting. That came from our head of research in Seattle. It was one of those creative events that happens occasionally that led to that. BJ: Can we touch on some of the risk factors for investors in the company at this time an immunology in general? GW: I think the ultimate risk factor is if it doesn’t work in the clinic but in this respect we have multiple shots on goal. We were experienced enough to look at Phase 1 results to decide what to progress into Phase 2. We’re doing that now. I think the risk factors have diminished over the years simply because we now know that one of the major problems in immunotherapy was the regulatory molecules, the check point molecules, that tumor cells produce which put the brakes on the immune system and allow activated T- cells to function. We now have the tools to address that. I think the risk of pricing is not there for us because we have a low cost “off the shelf” product. We have multiple collaboration opportunities. Toxicity doesn’t seem to be a really big issue for the vaccine approach. So, I think, the biggest risk factor is what the strength of Phase 2 data will look like. In Phase I the majority of patients given the vaccine had a robust immune response to the vaccine components. BJ: Can you talk about the financing? What is your outlook on capital needs going forward? GW: We did the up list from the bulletin board to NASDAQ last year, in October. To do that we raised around $9 million, which will take us through this year (2017). $6 million of the $9 million came from existing warrant holders. We also cleaned up the books to get rid of any derivative liability. We have no debt. The balance sheet is pretty clean. We have the Department of Defense funding that is going into the Mayo Clinic. We provide the product and we control the manufacturing. We have enough money for a year but, clearly, as we’ve now got multiple phase 2 programs, we will be continuing to finance the company in the future. We have a good group of investors. BJ: Who are your primary investors? GW: Our largest investor is a group called Eastern Capital from the Cayman Islands, also known as the Dart family funds, Ken Dart. It a big investment group of with a focused biotech arm. They’ve been very supportive of what we are doing. The market cap of the company, on a good day is $40 million, which for a Company in the immuno-oncology space , with multiple Phase 2s in the clinic, is very low. BJ: So what would be the more reflective market cap? GW: Looking at Immuno-oncology companies at a comparable stage, I think we are looking at least, $100-200 million. The fact that we are valued at this right now as we go into the release of Phase II data is a great buying opportunity. We only have 8.5 million shares outstanding and just over 10 million fully diluted. It’s an opportunity now as we have a number of key clinical things coming up this year and interim results in two studies, entry of two new clinical programs and we’ll also soon be publishing the results of phase 1. I can’t give you details on that but we are seeing long lasting immune responses consistent with getting memory T-cell involvement. BJ: When will the results of phase 1 be published? GW: I think they will be submitted for publication within the next 45-60 days. (May/June 2017) BJ: For final thoughts, anything else you would like to add on why investors should get involved now? GW: I think it’s where we are. We are in a very hot space which is likely to be the future of cancer therapy, that is using the body’s own immune system. We have multiple phase 2 trials that have already started with great collaborations with Mayo Clinic and with Memorial Sloan Kettering. We have non- diluted funding that is fully paying for two of the clinical trials, one in Triple Negative breast cancer and the other in DCIS. We have a good management team with people that have been around the block and know what they’re doing. We have multiple inflection points, as we’ve mentioned. Some of them are happening later on this year. We have a great opportunity. There will be multiple licensing opportunities for infectious disease, something that we are not yet focusing on. We’ve made good use of capital, including having non-diluted financing. If you look at this space, we are greatly undervalued and there is a large opportunity here for upside.