DJ Immutep Limited (IMM-AU): Unlocking the value of LAG-3 in autoimmunity
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goetzpartners securities Limited
Immutep Limited (IMM-AU): Unlocking the value of LAG-3 in autoimmunity
23-Apr-2019 / 11:32 GMT/BST
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*Published to the market and investors on 23rd April 2019 @ 6.45am (BST).*
*Immutep Limited (IMM-AU): Unlocking the value of LAG-3 in autoimmunity*
*Recommendation: OUTPERFORM*
*Target Price: AUD$ 0.078 *
*Current Price: AUD$ 0.030 (CoB on 18th April 2019)*
*KEY TAKEAWAY*
The biopharma industry is racing to develop combination therapies with
approved immune checkpoint ("IC") inhibitors targeting mainly PD-1 / L1 to
augment response rates. These include agents targeting other ICs such as
LAG-3, TIM-3 and TIGIT. Discovered by Immutep's CSO / CMO in 1990, LAG-3 has
been gaining increasing attention in the last few years, with c.50 trials
involving >10,400 patients ongoing. Immutep has the broadest LAG-3 targeting
pipeline, which includes four molecules with different mechanisms of action,
and to our knowledge is the only company (with partner GSK) to have LAG-3
targeted molecules for autoimmune disease. In this note, we review the
industry's overall LAG-3 pipeline and provide a detailed analysis of Immutep's
autoimmune assets, which are not yet adequately reflected in our valuation.
Hence, we see room for upside to our target price ("TP") of A$0.078, which
largely reflects the value of Immutep's oncology assets. Reiterate OUTPERFORM.
*Clinical trials for LAG-3 targeted compounds expanding fast*
An analysis of clinicaltrials.gov reveals that there are approx. 50 ongoing or
recently completed clinical trials involving LAG-3 targeted assets, up from
one in 2013. 2018 was a particularly busy year with 24 trial starts. All
trials except one target cancers, predominantly skin, lung, colorectal,
gastric and breast, as well as lymphomas. Most trials test combination
therapies, mainly with PD-1 / L1 inhibitors, but also chemotherapy. BMS is by
far the most active company: its anti-LAG-3 mAb relatlimab is undergoing
around 24 trials involving >5,300 patients, of which a few are expected to
read out this year. Immutep's pipeline includes four LAG-3 targeting assets,
all with different mechanisms of action. Two compounds are in clinical
development for solid tumours (eftilagimod alpha / IMP321, LAG525 / IMP701)
and two focus on autoimmune diseases (GSK2831781 [based on Immutep's IMP731],
IMP761).
*Tackling the root cause of autoimmune disease*
To our knowledge, GSK2831781 and IMP761 are the only LAG-3 targeted product
candidates in development for autoimmune diseases. Both assets aim to silence
autoreactive T cells, therefore acting on the root cause of autoimmune disease
and upstream of current therapies, which block inflammatory molecules to
provide symptomatic relief. GSK2831781, partnered with GSK since 2011, has
successfully completed a Phase I / Ib trial in healthy volunteers and patients
with plaque psoriasis. It is due to enter a Phase II trial in ulcerative
colitis ("UC") this year, with GSK recently confirming that proof of concept
data is expected in H2/2020E. Unencumbered asset IMP761 should start
first-in-human studies in H2/2020E (cell line development for GMP
manufacturing is ongoing) following encouraging in vivo studies recently
presented at the European Crohn's and Colitis Organisation ("ECCO") meeting.
Autoimmune assets not yet reflected in our valuation
Our valuation for Immutep consists almost entirely of risk-adjusted net
present values ("rNPVs") for the cancer assets plus net cash, including
negligible value for GSK2831781 and IMP761. Hence, there could be upside to
our TP in the coming year as we get more visibility on the continued
development of these assets. We remind investors that the key catalyst for
Immutep is Phase IIb data for lead asset eftilagimod alpha from the
event-driven AIPAC trial in metastatic breast cancer ("mBC"), now expected in
Q4/2019E. A positive outcome would increase our fair value to A$0.110.
Kind regards,
Brigitte de Lima | Analyst
goetzpartners Healthcare Research Team | Research Team
goetzpartners securities Limited
The Stanley Building, 7 Pancras Square, London, N1C 4AG, England, UK.
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