TICKERS: ONCS

Stock Price Jump Reflects Biotech's Active October
Research Report

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This immunotherapy firm's stock recently doubled its Nov. 7 price following lots of news, including a clinical data release, a trial launch and an executive appointment.

The series of recent catalysts for OncoSec Medical Inc. (ONCS:NASDAQ) includes its release of "positive long-term follow-up data," noted Ram Selvaraju, an analyst with H. C. Wainwright & Co. These results were from its Phase 2 OMS I-102 study, in which the immune stimulator ImmunoPulse IL-12 (pIL-12) was given in combination with Keytruda (pembrolizumab) to 11 melanoma patients unlikely to respond to anti-PD-1 therapy.

The results showed a progression-free survival rate of 57% at 15 months, and all 11 patients achieved duration of response. These data, together with the previously reported best overall response rate of 50% at 24 weeks, suggest "the combo therapy can prime a coordinated innate and adaptive immune response, which could then lead to improved clinical outcomes in patients not responsive to anti-PD-1 therapy alone, in our view," Selvaraju wrote.

The analyst added that these data also "bode well" for OncoSec's PISCES/KEYNOTE-695 Phase 2b trial, which it initiated in October. In that study, the same combination of therapies will be administered—ImmunoPulse plus Keytruda—but in a different patient population. These patients have unresectable metastatic melanoma and have progressed or are progressing on an anti-PD-1 therapy. Enrollment of the 48 patients will take place in the United States and Australia, and will be divided into two cohorts, 23 in the first, 25 in the second.

The clinical trial's primary endpoint is the best overall response rate at 24 weeks. Management has indicated an overall response rate of 30% "would be considered a success for this study," Selvaraju said. "We believe preliminary interim data could be reported around mid-2018."

If positive, those interim data "may allow the company to apply for breakthrough therapy designation for pIL-12 in patients who have failed anti-PD-1 monotherapies," Selvaraju explained.

He reiterated that ImmunoPulse IL-2 has both fast track and orphan status designations. Were the FDA to approve it, and were it to be brought to market, he added, "we note that 5,000–10,000 patients on an annual basis may benefit from this combo therapy with improved response rates."

Also in October, OncoSec "closed on two registered direct offerings" that yielded $8.2 million at about $1.34 per share, reported Selvaraju.

Finally, the biotech, in early November, appointed Daniel O'Connor as its CEO. "Mr. O'Connor's expertise in the biotech industry, particularly with regard to areas involving the overlap between immunology and oncology, should serve OncoSec well," Selvaraju concluded. Most recently, O'Connor was the CEO of Advaxis Inc. (ADXS:OTCBB), also an immuno-oncology company. Prior to that, he worked at ImClone Systems from 2003 to 2008, at which point it was sold to Eli Lilly. There, as senior vice president, general counsel and secretary, he supported the clinical development, launch and commercialization of Erbitux, among other accomplishments.

H.C. Wainwright & Co. maintains its Buy recommendation and $6 per share price target on OncoSec, whose shares are currently trading at around $2.08.

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