June 1 , 2012
More upside remaining
The key value driver is HyperAcute Pancreas (HAP) – a novel immunotherapy in P3 clinical trial for surgically-resected pancreatic cancer. A positive P2 (we recognize it was a single-arm study) in addition to the novel cancer vaccine platform are encouraging as we look toward P3 data (first interim analysis in late- 2012/early-2013E). We model for peak worldwide HAP sales of $850M in 2020, of which $635M is recognized by NLNK. We view the remainder of the pipeline as a free-call option.
While NLNK shares are up ~81% YTD, we believe long-term P2 overall survival data at ASCO (June 4) could serve as a near-term catalyst.
HAP P2 data is encouraging: HAP + standard-of-care (SOC; Gemzar + 5- FU/radiation) demonstrated 1-year overall survival (OS) of 86% (96% in the high-dose subset) versus 69% for Gemzar + 5-FU/ radiation in the RTOG 97- 04 study (best comparator) with a relatively clean adverse event profile.
Physicians are optimistic on HAP: They believe the theoretical basis behind the vaccines make sense (making human pancreatic cells look foreign so that they get destroyed). In terms of efficacy, they are encouraged when comparing the HAP P2 to SOC in the RTOG 97-04 study (see above). In addition, the MSKCC prognostic model suggested a 63% survival at 12 months (53% under a different model) in a similar patient population versus the 86% demonstrated by HAP. Looking at the P3 trial design, they like that the primary endpoint is OS, that patients now initiate HAP 10 weeks post-surgery (providing more recovery time), and given SOC can now be determined by the patients and oncologists versus the P2.