Scancell Holdings Plc. (LSE:SCLP.L) is a UK-based, cancer-focused, biotechnology company developing three vaccine products for skin, lung, breast and ovarian and osteosarcoma. The company has shown exciting promise in its lead immunotherapy candidate, SCIB1, in the treatment of melanoma, which it expects to be particularly useful in combination with checkpoint inhibitors such as Keytruda. The drug is able to stimulate the patient’s own immune system to eradicate tumor cells resulting in a 95% survival rate in the ongoing Phase I/II trial.
The company’s pipeline is divided into two vaccine platforms: ImmunoBody and Moditope. The ImmunoBody process works by targeting Fc receptors on the surface of dendritic cells. The mechanism targets these cells using both direct presentation and indirect (cross) presentation. Direct presentation transfers the ImmunoBody DNA into the antigen presenting cell (APC) via electroporation and then tumor-specific T cell epitopes are presented to T cells. Indirect presentation stimulates non-APCs to produce the antibody protein which targets the APC via the antibody’s Fc receptor. This stimulation of the APC through multiple pathways amplifies the immune response and produces larger quantities of high-avidity T-cells that can reduce tumor size.
ImmunoBody functions through the generation of high avidity CD4+ and CD8+ T-cell responses which enhances the sensitivity of T-cells to identify and kill cancer cells. The platform is flexible and can be modified to treat any tumor type by altering the expressed epitopes. The following figure shows the ImmunoBody structure.
Combination therapies have become commonplace in biotechnology and Scancell’s ImmunoBody assets are no exception. In vivo work has discovered substantial synergies between SCIB1 and checkpoint inhibitors. The exhibit below illustrates the effectiveness of SCIB1 and anti-PD-1 both alone and in combination using a murine model. In combination, the drugs resulted in an 85% survival rate at 50 days, compared to a control at approximately 10% and each compound individually from 50% to 60%.
The Moditope vaccine platform also activates the immune system against tumor cells by using the normal immune response under stressed conditions. Through the process of autophagy, stressed or dying cells begin to digest their own proteins. This process creates citrullinated peptides that can be identified by CD4+ T-cells, which in turn can destroy tumor cells that otherwise would be hidden from the immune system. In vivo studies have shown remarkable success in monotherapy, and Modi-1 was especially effective in tumors that are in a late stage of development. The following graphic shows the relative performance of the control and peptide combinations. Modi-1 displayed 100% survival at 50 days following treatment in a mouse model.
In its research, Scancell recognized that the failure of other cancer vaccines was likely attributable to insufficient avidity, or functional efficiency, in T-cell responses. The ImmunoBody approach delivers a T-cell with much higher avidity than current anti-cancer vaccines, overcoming this key hurdle. It employs a DNA plasmid delivering an antibody through electroporation, with the combination of these factors contributing to a 1,000 multiple higher level of T-cell avidity than that seen in other approaches.
The company is currently pursuing indications in melanoma, lung cancer, breast cancer, ovarian cancer and osteosarcoma. The company’s first product, SCIB1, has completed Phase I/II trials in melanoma and the second product, SCIB2, is close behind with clinical trials planned for non-small cell lung cancer in 2018. The third candidate, Modi-1, is currently in the preclinical stage and is currently refining its disease target in solid tumors. Scancell is in the final phases of selecting the optimal adjuvant to combine with the vaccine and plans to commence Phase I/II studies for breast cancer, ovarian cancer and osteosarcoma in 2018.
Scancell is now planning a trial in the United States which will combine SCIB1 with a checkpoint inhibitor, and is now in process of filing an IND for SCIB1 in the United States to undertake this Phase II study. The trial is expected to start in the second half of 2017.
Interim Results for 6-Month Period Ending October 31, 2016
Six month interim results were reported on January 31, 2017 and included a net loss of (0.66) pence per basic and diluted share which compares to a (0.52) pence loss in the prior year’s period. No revenues were reported. Development expenses were £1.3 million, greater than the £938 thousand in the prior year. First half FY:17 administrative expenses were £796 thousand compared to £430 in the first six months of the 2016 fiscal year. Operating loss for the six months was £2.1 million in 1H:17, compared to an operating loss of £1.4 million in 1H:16. Interest income of £56 thousand and tax credits of £334 thousand partially offset the operating loss resulting in a net loss of £1.7 million (vs. £1.2 million in the prior year). An increase in R&D work for Moditope and SCIB2 was behind the increase in development expenses while the opening of new offices in Oxford and La Jolla contributed to higher administrative expenses.
As of October 31, Scancell held £4.4 million in cash on its balance sheet, lower than the £6.5 million the company held six months earlier. Cash burn was £2.1 million, with no material difference from the operating loss for the period. A small investment in a mass spectrometer was made during the interim. No cash income tax credits were received as these totals are reimbursed at the end of the fiscal year.
Full year Results for 2015/16
Scancell Holdings reported full year results for the fiscal year ending April 30, 2016 last September. No revenue was reported as the company’s assets are currently in development. R&D expenses were £2.0 million, down slightly from the £2.1 million reported for the 2015 fiscal year. Administrative expenses rose to £1.0 million from £0.8 million over the same period. Research and development expenses declined year over year due to the elimination of drug manufacturing costs in 2016 and lower clinical trial costs for SCIB1, as the related trial had concluded early in the fiscal year. This decline was offset by higher administrative expenses which are allocated to corporate costs related to the lease of new office space in the United States and other development opportunities.
For FY:16, Scancell received interest from cash holdings of approximately £14 thousand, a decline from the £132 thousand received in FY:15. Due to tax credits available for small research and development companies, tax was a credit of £446 thousand in 2016, compared to £414 thousand credit in the prior year.
On a per share basis, net loss was 1.14 pence, greater than the net loss in the previous year of 1.04 pence. Weighted average shares outstanding increased from 225 million in 2015 to 228 million in 2016.
The balance sheet reflected cash of £6.5 million, an increase from the prior year’s £3.1 million. The increase was due to the April 1, 2016 share issuance which raised a gross £6.2 million and a net £5.8 million.
Net cash from operations, including income tax credits received, was a £2.3 million draw for FY:16. Cash from financing, net of share issue expenses, was £5.8 million, resulting in a net £3.5 million increase in cash on the balance sheet. Recognizing the £3.1 million in cash on the balance at the beginning of the year, cash and equivalents as of April 30, 2016 was £6.5 million.
Scancell has completed a Phase I/II trial in 35 patients using SCIB1 DNA immunotherapy to treat melanoma. The trial has been registered with the NIH with details available at clinicaltrials.gov. The trial evaluated the safety and tolerability of SCIB1, the safety of the injection (via ICHOR’s TriGrid electroporation device) and the immunological effect of the drug. Patients were given five injections over a six month period
The trial was launched in May 2010 and provided an update in early January 2017. In the 16 patients with Stage 3/4 resected disease on a 2/4mg dose the median observation time since patient enrollment was 52 months, and first diagnosis of metastatic disease was 58 months. In the four patients given the higher 8mg dose, who were enrolled at a later date, the median observation time since entry is currently 21 months and first diagnosis at 27 months. Key details include:
- SCIB1 was safe and well tolerated in a range of 0.4 mg to 8 mg with no serious side effects related to the drug
- Evidence of immune response and positive correlation between dose and effectiveness was observed
- Immune response is stronger in patients without tumor present
- One death reported in the cohort of 20 patients with resected Stage 3/4 disease
The study concluded that SCIB1 may be particularly effective as monotherapy in early stage patients and that long term administration may provide material benefit. The data included in the clinical report will be used to support an investigational new drug (IND) filing with the FDA in the first half of 2017 for use in combination therapy with a checkpoint inhibitor. The pre-IND meeting with the FDA is scheduled for February 14, 2017.
If the IND is approved, a Phase IIb trial will be conducted in combination therapy with an anti-PD1 checkpoint inhibitor, which we believe will be Merck’s Keytruda (pembrolizumab).
Scancell is also working on a subsequent compound called SCIB2, which targets the lung tumor cancer antigen NY-ESO-1. SCIB2 has been sufficiently defined to advance into clinical development. Its method of action is to attack tumors that express the NY-ESO-1 antigen, which is present in lung, oesophageal, gastric, ovarian and bladder cancers. The company is targeting the filing of an IND by 3Q:17, and the treatment of the first patient in clinical trials by 1Q:18. On January 30, Scancell announced a collaboration with the Addario Lung Cancer Medical Institute to help bring patients into clinical trials and potentially accelerate development of SCIB2 compared to previous timelines.
The Moditope platform produces the third product called Modi-1, which should see a clinical trial application (CTA) in the UK and an IND filing in the US by 3Q:17. The company anticipates that the first patient will be treated with Modi-1 by 1Q:18. The progress of the candidates are listed in the graphic below.
Scancell stock, which trades on the London exchange, has declined 16% over the last year to 15.00p per share as of January 31, 2017. Following management reorganization and the announcement to expand its presence in the United States, the stock ran up from the mid-teens to ~20p in spring 2016. However, the rally was short lived when Scancell announced that its current supplies of SCIB1 were no longer within specifications due to the age of the drug material and the related suspension of the dosing in the trial. Positive trial data in July and the appointment of Eurogentec as the new supplier of SCIB1 led to a resurgence in the shares that faded on a lack of material news in the last months of 2016. The shares have traded in a range of 12.80p to 21.88p over the last year.
Trading volume over the last three months has averaged 121 thousand shares per day. SCLP does not generate revenues and due to losses, does not have a positive P/E ratio.
Scancell has an impressive portfolio consisting of two platforms, and three compounds covering five cancer indications. Preclinical and Phase I/II trials for SCIB1 have shown promise especially when used in conjunction with checkpoint inhibitors. Given the positive data, the company is moving forward with a Phase II combination trial later in 2017 which is expected to take a year to generate topline data. While the stock suffered a setback due to drug product supply issues mid-year 2016, we see strong evidence for a viable and attractive platform and cancer therapy which should be very attractive to major pharmaceutical partners in the space.
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