Immunocellular Therapeutics Ltd (NYSE:IMUC) CEO Interview

IMUC LOGOAndrew Gengos B&W edited QG 11 30 12

Immunocellular Therapeutics
CEO: Andrew Gengos


About: ImmunoCellular Therapeutics, Ltd.  is a Los Angeles-based clinical-stage company that is developing immune-based therapies for the treatment of brain and other cancers. ImmunoCellular has concluded a phase II trial of its lead product candidate, ICT-107, a dendritic cell-based cancer immunotherapy targeting multiple tumor-associated antigens for glioblastoma. ImmunoCellular’s pipeline also includes: ICT-121, a dendritic cell immunotherapy targeting CD133; ICT-140, a dendritic cell immunotherapy targeting ovarian cancer antigens and cancer stem cells; and the Stem-to-T-cell research program which engineers the patient’s hematopoietic stem cells to generate antigen-specific cancer killing T-cells.


WSA: Good day from Wall Street.  This is Juan Costello, Senior Analyst of the Wall Street Analyzer.  Joining us today is Andrew Gengos, the CEO of ImmunoCellular Therapeutics.  The company trades on the New York Stock Exchange, ticker symbol IMUC.  Thanks for joining us today there, Andrew.

Andrew Gengos:  Great.  Thanks, Juan.

WSA: Great. Now, starting off, please give us a history and overview of the company.

Andrew Gengos:  ImmunoCellular is a pretty small company.  We’re five full-time employees and four part-time employees.  So, we’re pretty virtual but we’re still, as you said, listed on the New York Stock Exchange and obviously publicly traded.  The history of the company, very briefly, is our initial technology, cancer immunotherapy technology, which came from Cedars-Sinai Medical Center in Los Angeles, was put into a publicly traded shell in 2006.  Two founders there, John Yu and Keith Black, fairly prominent neurosurgeons in the US and immunological researchers.  They put this technology into the company in 2006.  We were uplisted to the New York Stock Exchange in the middle of 2012 and we’ve been advancing that technology.  We’re now approaching phase III, and we’ve also brought in another technology also in cancer immunotherapy from the California Institute of Technology, David Baltimore’s lab there, late last year.  So, we have two cancer immunotherapy platforms that we’re trying to produce products from to treat fairly grievous cancers.

WSA: And can you go over the recent agreement with PharmaCell on ICT-107?

Andrew Gengos:  Yes.  If we could step back a little bit, ICT-107 is our lead cancer immunotherapy.  It seeks to treat cancer by getting the patient’s own immune system to attack the cancer.  And we have completed a phase II trial in late 2013.  And, in the interim, we’ve been both updating that trial information, producing some pretty interesting results, and also designing the phase III program.  We’ve talked to the US regulators, the FDA, and the European regulators, the EMA (European Medicines Agency), and we’re all set to start a phase III trial. And so, what you’re going to see from the company is a set of a near-term news relating to the start of that phase III.  And the piece that you’ve mentioned is because of the nature of these products, we want to run this phase III trial in both the United States and Europe, we need to manufacture in the United States and Europe.  And so, what we’re starting to do is tech transfer our phase III and commercial-ready manufacturing process from our manufacturer in the United States, with PCT, to our manufacturer in Europe which is PharmaCell, and that’s the recent news we announced.

WSA: And can you go over some of the other products there, the other candidates in your pipeline?

Andrew Gengos:  Certainly.  So, as I said, there are really two platforms that we have.  Boiling it down, what we’re trying to do is again treat the patient’s cancer with the patient’s own immune system.  And the sharp end of that stick in the immune system is called the killer T-cell.  These are cells that are capable of killing tumor cells in the patient.  And so, both of our technology platforms seek to create a population of killer T-cells that can recognize the patient’s own tumor.

And so, we come at it from two ways., The first way is a dendritic cell cancer immunotherapy. From a cancer patient, we take a bag of white blood cells.  We separate them out on a certain cell called the monocyte.  We mature that into a dendritic cell, and we engineer it outside the patient’s body so that when we re-administer it to the patient, it lights up the immune system and creates what’s called an antigen-specific killer T-cell population in the patient.  Antigen-specific means that that killer T-cell population knows exactly what to look for in terms of the tumor cell, goes out and finds that, and potentially kills that.

So, one way of doing this is the dendritic cell immunotherapy platform.  There are three separate programs there.  Our lead program we mentioned, ICT-107 is entering phase III for the treatment of glioblastoma, that’s brain cancer.  ICT-121 is in phase I right now treating patients for the recurrent form of that brain cancer.  And ICT-140 is an ovarian cancer immunotherapy that we’re ready to put into phase I as well, but right now, we are waiting for a partnership or other sources of capital.

The other platform, which we recently in-licensed from Caltech last year is a platform that starts with the patient’s own hematopoietic stem cells.  These are the stem cells in the patient that are capable of making all the blood cells, including some of the key cells in the immune system.  And so, what we do is we remove the stem cells or the population of stem cells from the patient.  We, again, engineer those stem cells outside the patient to be capable, once they’re re-administered to the patient, of doing what stem cells do.  They divide into another stem cell, into a daughter cell, and that daughter cell is once again an antigen-specific killer T-cell. It is programmed now to look for, and seek out, and kill the tumor cell for which we engineer that kind of technology into the stem cell for the T-cell to identify on the tumor surface.

So, really two ways of getting at the same thing: an antigen specific killer T cell killing of the tumor.  The stem cell program is preclinical, meaning we haven’t treated any patients yet.  We’re probably two to three years away, but we’re very excited about getting a research program up and running.  We recently hired some key people to do that and we’re making progress in that area as well.

WSA: And what are some of the key trends that you’re targeting right now in this sector, and how is the company positioned to capitalize?

Andrew Gengos:  Well, I think the field of cancer immunotherapy in biopharma companies, if it’s not the hottest field right now, I don’t know what is.  And so, you see a ton of interest out there in big companies like Merck, and BMS, and others who are producing these checkpoint inhibitor programs.  What those programs do is essentially create a larger general immune response with the hopes, in a patient, that a larger general immune response will lead to the detection of tumor cells and the termination of them.  So, there’s a lot of interest in that area.

There’s also interest in another field called costimulatory molecules, and there are some companies working on stimulating the immune system again with a general immune response to try to treat certain diseases including cancer.

The field we’re interested in that we just described is more of an antigen-specific approach.  And so, we’re trying to attack the tumor in the way I just described.  And there’s another whole set of companies out there trying to directly engineer T-cells outside of the body.  So, remove them from the patient, engineer them, put them back in the patient to identify and kill the tumors.  So, there are a lot of companies out there.  You know, on the small side, Juno and Kite that you’ve seen recently doing very large initial public offerings.  On the large side, Merck, and BMS, and Roche working in the space.  It’s a very, very, exciting area, and we’re certainly excited to be playing in it although I think – and we might discuss this a little later in the conversation – we’re a bit overlooked.

WSA: And what are some of the key factors that you feel make the company unique from some of the other players in the sector?

Andrew Gengos:  Well, there is only a small handful of companies that are pursuing a dendritic cell immunotherapy approach to treating the tumor.  Your viewers and listeners are probably all aware of Dendreon and some other companies that historically worked in this space.  We kind of think of that as the first generation of dendritic cell therapy.  We’re in the second generation.  We solved some of the key concerns with Dendreon and other platforms.  Most importantly, their cost of goods probably led to their bankruptcy or at least contributed to their bankruptcy.  We solved that problem.

And so, this is a relatively small area within that cancer immunotherapy field that we’re working in: the dendritic cell space.  So, we’re very encouraged about the data we’ve generated to date.  Glioblastoma is an orphan disease.  That’s the brain cancer area.  We have orphan designation in both the US and Europe.  And we’re really the only company that ran a phase II trial using overall survival, which is the registrational endpoint that the regulators are asking for, and having a placebo arm in the phase II trial.

None of our competitors have done that.  They’ve either not had a control arm, or not used overall survival as the endpoint in their earlier trials, or both.  And so, we’re very excited to have generated some very compelling, we think, phase II data on overall survival, as well as progression-free survival, compared to an in-trial placebo.  And we feel like we have all the information that we need, and frankly have discussed that with the various regulators I’ve talked about, to take this program into phase III.

We have also talked to the cancer cooperative groups in the United States and Europe.  These are the major clinical researchers at the high-end institutions in the US and Europe that treat these types of patients.  And they are very excited to potentially work with us to provide access to not only their key opinion leader expertise, but also they have the patients.  They’re the folks that treat the patients in these territories.  So, we’re very excited to be able to work with them on this program.

WSA: And what are some of the other key goals and milestones that you’re hoping to accomplish over the course of the next year?

Andrew Gengos:  So, really what this is about is there are two stories here.  ICT-107 phase III: that is the central issue for the company.  Hopefully, this year, what you’re going to see is a series of pieces of news come out about the company moving toward progressing to a start of that trial.  And so, you’ve seen one, the announcement of PharmaCell in Europe being designated as our European manufacturer.  We are currently, as I said, transferring our manufacturing, our commercial phase III-ready manufacturing process to them in Europe.  So, you’re going to be seeing news about the hopefully successful completions of that tech transfer.  You’re going to see collaborations announced with those cancer cooperative groups that I mentioned, the one in Europe and the one in the United States.  We haven’t signed a contract yet with either of those, but we’re working toward that and hopefully, you’ll see those contracts signed in the next few months.We are applying for what’s called a special protocol assessment with the FDA.  What that means is you get the FDA to review and approve in advance the phase III design of the trial.  There’s no guarantee that the trial will lead to a registration, and ultimately product sales, but having the FDA review and approve the protocol of the trial in advance of the phase III is something that’s very important and not often done; certainly not in the space we’re working in, we don’t see that.  So, we’ll be the first, to my knowledge, to get that if we are fortunate enough to get their approval.  And you’ll see that happen in the next few months, hopefully.  Then we’ll basically start the trial.

So, you’ll see sites in the United States come up and ready to enroll, probably at the end of the third quarter toward the fourth quarter.  And then you’ll see sites in Europe come up and begin enrollment shortly thereafter.  And I think we’re also considering Canada.  So, 2015 is a big year for us.  We’ve also just successfully raised capital in February of this year.  So, if you look at our balance sheet, we ended December with about $23 million, and we’ve raised about $14.5 million net in the February financing.  So, you can add that up, $35 million, roughly, and no debt.

So, we’re in a good balance sheet situation to start this trial.  We’ll see a lot of, hopefully, news flow around that.  And the second component, which albeit is not as important perhaps to the capital market, is that we’re going to see progress made on our stem cell platform that we in-licensed from Caltech.  We are in the process of launching a set of collaborations around that with outside research organizations that could be quite exciting and you’re hopefully going to see some news flow, preclinical news flow, out of that platform.

WSA: Well, great.  And as far as investors in the financial community are concerned, Andrew, as you guys also put out your year-end and Q4 results last month, do you believe that your story and progress are completely understood and appreciated by them?  And if not, what do you wish investors better understood about the company?

Andrew Gengos:  You know, Juan, I’m going to bet that I’m not the first CEO that you’ve interviewed that thinks that his or her company is undervalued.

WSA: Haha, yeah.

Andrew Gengos:  But, you know, I really do think that our dendritic cell lead program ICT-107 in glioblastoma, going into phase III, is a bit overlooked in the market.  And, you know, I can kind of understand that.  While that’s a bit frustrating to me, and perhaps some of our shareholders, there’s a lot going on in the cancer immunotherapy space.  As I said before, I think it’s probably the hottest space in biopharma right now today.

If I had a wish, I’d wish that people would take a closer look at this program because, to me, we’re trading at about $40 to $50 million market cap.  And to have a phase III program in cancer immunotherapy that’s unencumbered, we own all the rights for this program, certainly in the United States and European markets which is where we’re targeting. For us to have that kind of opportunity to move into phase III and have phase II data that supports that, not only is that the management’s belief but also the key opinion leader community has looked at this data and believe that that’s the case.

To have that opportunity and to be somewhat overlooked by the capital markets, as I said, it’s a bit frustrating.  I’m not unmotivated.  Our team is very good, very experienced.  We are going to drive this program forward, but I’d sure like a bit more attention on that lead program because I think it’s quite valuable, and I think it’s quite overlooked right now.

WSA: Certainly.  And perhaps you can walk us through your background and experience, and talk a little bit about the key management.

Andrew Gengos:  Sure.  My personal background is I have, educationally, a degree from MIT in Chemical Engineering.  I also have an MBA and I spent about the last 20 years working in the biopharma industry.  I’ve worked for five biotechnology companies, both very large like Amgen and Chiron, and quite small like ImmunoCellular, Dynavax, and Neuraltus.  So, I have a lot of experience in the corporate strategy business development area.  For instance, at Amgen, I ran all corporate strategy, all of the M&A, in-licensing, out-licensing, venture capital, alliance management.  I did that for about seven years, reported to the person who’s actually CEO of Amgen right now.  So, I have a lot of experience working in big and small companies.  I have a lot of financial experience, a lot of business development experience.

We have two other key employees.  Tony Gringeri who was an ex-colleague of mine at Amgen.  He has more than 20 years of experience in the industry.  He’s the Senior Vice President of Strategic Resources in the company.  Very capable person, really wears lots of hats.  Runs our manufacturing area, runs our clinical development area, and lots of other things.

We’ve also recently hired Steve Swanson who is about the best immunologist at Amgen.  Unfortunately, for this community, we’re co-located near Amgen in Los Angeles.  Amgen has decided to reduce its R&D footprint in the Thousand Oaks, Los Angeles area and increased it in areas like Boston and San Francisco.  And so, we’ve been the beneficiary of that, being able to hire a lot of good talent from Amgen and Steve is certainly one of those people.  I recently hired him to be in charge of the Caltech technology, the Stem-to-T-cell technology, and he’s on board and actively managing that.

In addition, we have John Yu who’s one of our two founders that I mentioned before.  He’s still quite involved in the company and a real asset to us, both in the space of dendritic cell immunotherapy, as well as he treats the patients.  He’s a neurosurgeon, so he actually treats the patients that we’re seeking to treat with our lead program, ICT-107.

WSA: Great.  And once again joining us today is Andrew Gengos, the CEO of ImmunoCellular Therapeutics.  The company trades on the New York Stock Exchange, ticker symbol IMUC.  Currently trading at 48 cents a share, market cap is about $43 million.  And before we conclude here, Andrew, to briefly recap some of your key points, why do you believe investors should consider the company as a good investment opportunity today?

Andrew Gengos:  Well, stepping back a bit, I think, once again, there is a lot of hope and interest in this field of cancer immunotherapy, no doubt about that.  I think we’re a relatively overlooked story in a group of companies that perhaps get a bit more attention.  We have our lead program going into phase III.  Right now, we fully own that program.  We feel that we’ve designed a very compelling phase III protocol that’s informed from, in our view, convincing phase II data from the phase II trial [which was] designed properly, and run well in producing the data that you need to have confidence in the design for phase III.

There are no certainties in this industry at all, but we feel like we’ve got a very good shot at executing this phase III, and perhaps producing compelling information to get approval both in the United States and Europe.  We’ll obviously have to see based on the data.  And then, backing up that cancer immunotherapy platform is this very exciting Stem-to-T-cell platform, which we hope to launch products on thereafter.

So, we think we have a nice set of technologies in a very interesting field, cancer immunotherapy, right now from which we can launch products.  And I think if investors took a hard look at us, they would hopefully realize that, or they might agree with us, and perhaps be more interested in our company and, specifically, our lead asset going into phase III.

WSA: Well, we certainly look forward to continue to track the company’s growth and report on your upcoming progress.  And we’d like to thank you for taking the time to join us today, Andrew, and update our investor audience on IMUC.

Andrew Gengos:  Thanks Juan.  I really appreciate the opportunity for this conversation.


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