NEW YORK, NY / ACCESSWIRE / April 26, 2016 / AstraZeneca (AZN), a big pharma leader in immuno-oncology has placed its bets on a cancer vaccine technology from TapImmune (OTCQB: TPIV). Amongst a bevy of partnerships, collaborations, and M&A activity between big pharma and innovative biotechs focused on immunotherapies that treat cancer, TapImmune is getting much deserved attention from its bigger brethren looking to fill their pipelines with the most promising cancer cures.
A joint AstraZeneca-TapImmune Phase 2 ovarian cancer trial will start this quarter at the prestigious Sloan Kettering Institute, according to a press release issued a few days ago. The trial will test a combination therapy which includes TapImmune's TPIV 200, a T-cell cancer vaccine, with AstraZeneca's durvalumab an anti-PD-L1 antibody, in 40 women who have high-grade ovarian cancer and have not been responsive to platinum chemotherapy, currently the standard of care for advanced ovarian cancer.
Orphan Drug designation has already been granted by the FDA to TPIV 200 for ovarian cancer. The companies did not state when investors will hear top line data from this trial, however, the primary endpoint will look at efficacy rates 6 months post-treatment, so we may see results within the next three to four quarters.
With a current market cap of $45 million, Tapimmune is an extremely ripe acquisition target, even if acquired at multiple many times its current trading price. This is wholly justifiable given the company's hot immuno-oncology portfolio. TapImmune would be a very easy and very worthwhile acquisition for AstraZeneca, which is worth about $76 billion and is sitting on $6 billion in cash.
TapImmune is likely being sized up AstraZeneca's competitors, all vying for dominance the in the cancer immunotherapy space, including Roche (RHHBY), Merck (MRK), Johnson & Johnson (JNJ), AbbVie (ABBV), Bristol-Myers Squibb (BMY) and others.
Pricing of recent deals shines a spotlight on how undervalued TapImmune is in the space. Merck recently signed a deal to pay $605 million for Israel-based cCAM Biotherapeutics. $95 million was paid upfront, with the balance of $510 million to come based on milestones, for a company whose lead candidate CM-24 is still in Phase 1. Merck is ready to spend after its drug, Keytruda, a PD-1 blocker got FDA approval for melanoma last year. Merck is also paying $375 million to buy OncoEthix for its Phase 1b drug OTX015, a BET inhibitor. $110 million was delivered up front with $265 million coming to OncoEthix upon completion of milestones. J&J just did a deal with Alligator Biosciences worth $700 million, for Alligator's Phase 1 CD40 targeting drug ADC-1013. Abbvie just did a $665 million deal with Argenx for ARGX-115 which is still in preclinicals.
$33 billion in annual sales by 2022 is projected by Morningstar for immuno-oncology drugs, which are expected to be very-high-margin products. This can hugely impact the profitability of big pharma, making acquisitions of technologies like TapImmune's all the more valuable. Further fueling the fire are the FDA's recent approvals of immuno-oncology drugs Opdivo and Keytruda.
TapImmune has much more to offer than TPIV 200 for ovarian cancer. TPIV 200 is also in a U.S. Department of Defense funded Phase 2 trial for triple negative breast cancer at the world renowned Mayo Clinic. TPIV 100 is headed into Phase 2 for HER2/neu breast cancer. The company's preclinical pipeline also holds promise for some very innovative new vaccines.
Big pharma tapping into TapImmune as an acquisition candidate is likely. Merck Research Laboratories'
Vice President and Therapeutic Area Head of Oncology Early Stage Development, Eric Rubin stated Merck is "scouring the world, looking for immunomodulatory agents." Based on recent M&A activity, Merck is not alone.
RAY DIRKS Research suggests that Readers/Investors place no more than 1% of the funds they devote to common stocks in any one issue. It's best to diversify.
About Ray Dirks
Ray Dirks came to Wall Street with Goldman, Sachs & Co. in 1963 where he was established as the leading insurance stock analyst dealing with institutional investors and high -net worth investors both in the U.S. and internationally.
In 1973 Ray uncovered the biggest Ponzi scheme of the 20th century, the Equity Funding fraud. Over the years Ray has expanded his stock market research to include Healthcare Stocks and Special Situations. Ray has written two books, "The Great Wall Street Scandal" and "Heads You Win, Tails You Win", published by McGraw-Hill and Bantam Books respectively. He continues to provide research to institutions and individuals, and he manages money for some individual investors.
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SOURCE: RAY DIRKS Research
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