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OncoSec Advances IL 12 Immunotherapy for Melanoma

Image result for oncosecOncoSec Medical Incorporated (NASDAQ: ONCS) was recently granted FDA Fast Track designation to address the large population of non-responders to the current leading checkpoint inhibitor therapies for stage 4 melanoma. The leading drugs in this $5 billion market are marketed under the names, Opdivo and Keytruda.   An estimated 70% of patients do not respond to these checkpoint therapies. OncoSec has shown data indicating that when used with their technology ImmunoPulse IL-12, there is a 48% response in this non-responder patient population. Approximately 10,000 patients each year could be candidates for OncoSec's ImmunoPulse IL-12 when used in combination with Opdivo (Bristol Myers Squibb) or Keytruda (Merck), providing hope to patients that previously had no other options.  This represents a market size of about $1.4 billion in revenue. OncoSec's progress is the result of a strategy change 12 months ago, when CEO Punit Dhillon and OncoSec management team determined the fastest strategy to getting a drug approved was not with a first-line monotherapy strategy, but to meet the substantial opportunity of combined treatment for the non-responders to existing treatments. The company cut their burn rate by 50% and is focused on having ImmunoPulse IL-12 approved to address metastatic melanoma. The strategy seems to have paid off.  As noted above, OncoSec reported data that showed 48% of patients responded to the combination of OncoSec’s ImmunoPulse IL-12 and checkpoint inhibitor therapies, demonstrating that they can make these leading drugs work much more effectively and offering hope for patients that fail first line therapy of Keytruda or Opdivo, and have no other options. Founded in 2011,  San Diego based OncoSec is focused on cancer immunotherapy, a market expected to approach $35 billion in less than 10 years. Having received fast track designation by the FDA, OncoSec intends to be first drug approved for non-responders and with the potential of accelerated approval, may have a registration trial in place by 2019.  The Company feels that, at the current pace, they may be one to two years away from marketing approval. The progress of their technology  should be welcome news for Merck and Bristol Myers, who have a 50% market share of a $5 billion market, but whose current checkpoint inhibitor therapies work in just 30% of patients. The company as has attracted some very skilled, formerly large pharmaceutical company employees to their management team, which they believe validates their strategy and will help with future collaborations. With over $20 million in cash they are well situated to reach additional milestones before needing to raise additional capital. The company stock is trading at $1.25 giving them a $25 million market cap and an enterprise value of around $5 million. Given the market need and positioning, it appears this stock could be in for a big run. For more on OncoSec, visit the company’s website.

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