Medicenna Therapeutics Corp [TSX:MDNA] (OTCQB:MDNAF) is a Toronto-based clinical-stage immune-oncology company advancing novel, highly selective versions of IL-2, IL-4 and IL-13 Superkines™ and first in class Empowered Cytokines™. The company is developing a unique set of tunable Superkines™ that can be fused with pro-apoptotic proteins to precisely deliver potent cell-killing agents to cancer cells, the immunosuppressive tumor micro-environment, and cancer stem cells without harming healthy cells.
Despite more than a century of investigation and clinical research, cancer remains one of the most significant burdens to human health and well-being with over 14 million new cases diagnosed per year worldwide resulting in over 8 million deaths. What was once thought to be a single disease caused by simple dysregulation of cellular growth pathways has become infinitely complex as we now understand that “cancer” is not a single enemy, but a species that is constantly evolving. What is known is that all cancers are ultimately caused by dysregulated cell growth due to genetic mutations in key “proliferative” genes, and that there exists a complex interaction between the cancer cells and surrounding non-malignant cells of the tumor microenvironment (TME) that support the process of cancer growth while suppressing the patient’s immune response. Early discovery of “oncogenic drivers” (the genetic mutations that cause cells to become cancerous) led to the development of targeted therapies designed to address the unique molecular makeup of many cancer subtypes. This was a big step-up from non-targeted chemotherapy and radiation, however there still exists a tremendous need for additional therapies to tackle the most devious of cancers. The most efficient way to kill a species is to alter its ecosystem by making it inhospitable and unlivable. There will never be a single cure for cancer, but the medical community is well-armed and stock piling munitions to wage total war against this insidious killer.
Evolution does not happen in a vacuum. What I mean is that all of the organisms (from a single cell to a fully-formed being) play a role in one another’s development. Evolution is a dance, seemingly smooth and scripted (due to the long time horizons on which it unfolds), but often jarring and unchoreographed. When organisms compete for survival they are pitted against one another on the dance floor, the winner determined by who is still moving when the music stops. Human beings and cancer have been courting each other in the ballroom since the first human fell out of the tree, and our immune systems have been the metronome keeping our feet moving with the beat. Recently, biologists have observed cancers evading immune detection by altering the environment in which the tumor exists (the tumor microenvironment, or “TME”). Changes to the TME shield cancer cells from detection by the immune system by arranging “normal” cells on their exterior (forming a physical barrier). This evasion is now accepted as a hallmark of cancer. Recent innovation in immune-oncology has taken the TME into consideration and designed therapies to “unmask” the tumor cells and then orchestrate an attack. These immunotherapies are made by modifying existing immune cells/signaling molecules to enhance their duration (half-life), precision (specifically targeting abnormal cells and ignoring healthy cells), and potency. Various delivery mechanisms have also been developed to improve the efficacy of immunotherapies and control off-target (non-specific) effects.
The first commercialized immunotherapy for cancer was an engineered variant of the cytokine protein interferon-alpha (IFNα), which was approved in 1986 for the treatment of hairy cell leukemia. Cytokines are small proteins that regulate the immune system response. They are critical components of the immune system and are released by immune cells (such as T cells) upon detection of a foreign agent or abnormal cell, initiating the inflammation cascade and guiding cytotoxic cells (such as T cells and NK cells) to their targets for elimination. Cytokines have been well-studied as potential therapeutics to modulate the immune response and target elimination of hidden cancer cells.
The second cytokine to be used as a cancer-fighting agent was interleukin-2 (IL-2), a well-characterized protein that has a myriad of effects on the immune system. Originally identified as “T cell Growth Factor” in 1976 due to its ability to stimulate cytotoxic T cells to eliminate foreign pathogens and abnormal cells, IL-2 became the first immunotherapy candidate for renal carcinoma (1992) and metastatic melanoma (1998). Like IFNα, the limited duration of effectiveness was a severe limitation that required high doses of the cytokine to be administered to have any long-term effects. Serious side effects such as cytokine release syndrome and vascular leak syndrome were reported at those doses. While the first iterations of IFNα and IL-2 were less than stellar, they served as a beautiful proof-of-concept that cytokines can be used to send cancer into remission.
Proleukin (IL-2) was the first cytokine targeted immunotherapy for metastatic melanoma and renal cell carcinoma, but it was largely ineffective at eliminating cancer due to its short half-life and limited duration of efficacy. This was because IL-2 was not efficient at activating the cytotoxic immune cells, such as T cells and NK cells, that attack and destroy cancer cells due to its low affinity (binding potential) for the CD122 receptor,. Importantly, a strong immune response is created by the selective binding to the CD122 receptor over the CD25 receptor, both of which are targeted by IL-2. As previously discussed, IL-2 therapy required extremely high doses and frequent administration (3x per day) to send tumors into remission, which was associated with severe and potentially deadly side effects. A successful IL-2 immunotherapy would need to (1) specifically target the CD122 receptor over the CD25 receptor, (2) increase the half-life and increase the duration of efficacy, and (3) enhance the potency of the drug so that small, infrequent doses are effective.
With these considerations in mind, Medicenna embarked on a quest to create IL-2 variants (under their “MDNA109” platform) with higher affinities for the CD122 receptor over the CD25 receptor (both expressed on immune cells- such as T cells and NK cells), which is one of the keys to their innovation as this selective binding drastically improves the activation of cytotoxic T cells and NK cells and efficacy of the drug. In early experiments in mice, the company discovered that their lead engineered IL-2 variant, dubbed “MDNA11”, had a 200x increase in affinity for the CD122 receptor (i.e., only 1.4nM of MDNA11 was needed to give the same response as 280nM of Proleukin IL-2) and similar binding characteristics for the CD25 receptor (Fig 1). What this means is that MDNA11 is a potent activator of immune cells due to Medicenna’s intelligent engineering of the molecule. Importantly, MDNA11 also has a much longer half-life than Proleukin IL-2 (2 weeks v. 8 hrs).
The development of IL-2 variants is hot space, and there are several competing immune-oncology drug development programs at various stages of development competing with Medicenna (see “Investment Considerations” section at the end of this article). Competing IL-2 variants such as Nektar’s “NKTR-214” and Synthorx’s “THOR-707” have a similar half-life as MDNA11 (half-life approx. 2 weeks) but are comparatively weak binders to the CD122 receptor, and therefore do not elicit as strong an immune response. Compared to Proleukin IL-2, MDNA11 has enhanced potency in activating CD8+ cytotoxic T cells and reduced potency in activating the pro-tumor “Treg cells” (Fig 2). MDNA11 administered in combination with anti-CTLA4, an antibody that prevents tumor cells from killing immune cells, was substantially better at inhibiting tumor formation than the similar NKTR-214 combination therapy (Fig 3). Importantly, MDNA11 induces a strong “memory response” in mice as determined by a drastic reduction in the tumor volume of a second tumor implanted after a first round of treatment.
Medicenna is currently conducting an “IND-enabling” preclinical study to pursue Phase 1 human clinical trials. The company expects to complete their preclinical study and file the Investigational New Drug (IND) application by the Q1 2021, with a Phase 1 study planned for H1 2021. This Phase 1 study, designed to evaluate the safety, pharmacokinetics (how the body distributes and metabolizes the drug), and pharmacodynamics (what the drug does to the body) in monkeys, has revealed that MDNA11 induces a durable and dose dependent expression of Ki67, a molecular marker that indicates the expansion of CD8+ cytotoxic T cells and other cancer-killing immune cells (such as NK cells). Importantly, the pro-tumor Treg cells are not induced to proliferate, nor did MDNA11 induce the expansion of eosinophils (which are responsible for vascular leak syndrome, one of the most concerning side effects of immunotherapies). In summary, the preliminary preclinical data suggests that MNDA11 is a well-tolerated and potent stimulator of the immune cells and inhibitor of tumor growth.
Glioblastoma Multiforme (GBM) is the pit bull of cancer. Hyper-aggressive and unrelenting, once it latches onto the brain it refuses to let go. The causes of GBM are unknown, but the effects are all too apparent. The standard of care for newly diagnosed BGM consists of surgery, radiotherapy, and concurrent TMZ (temozolomide), all of which have not been advanced in over a decade and have limited efficacy (even with surgical removal the GBM tumor usually recurs). Survival is a paltry 12-15 months after diagnosis with a 5-year survival rate of only ~3%. Although rare (about 3 in 100,000 people develop this disease per year) and poorly understood, GBM is a prime target for next-generation cancer immunotherapies. A novel, effective treatment for this disease would disrupt an over $2B global market. Pharma knows this, and the development of novel therapeutic agents and “first-in-class” drugs for GBM is an active area of research with many new classes of drugs in clinical trials (see “Investment Considerations” section below).
In the early 2000s, researchers discovered that human glioma cell lines are rich in interleukin-4 (IL-4) receptors (IL-4R). Like IL-2, IL-4 is a cytokine that modulates immune function and has a profound effect in the brain via the production of brain-derived neurotrophic factor (BDNF), which is responsible for growth and proliferation of neurons. In the absence of IL-4 production mice have been shown to accumulate cognitive defects. IL-4 is typically thought to assist in tumor control by blocking the formation of new blood vessels (angiogenesis) in the tumor microenvironment, starving and eventually killing the cancerous brain cells. Interestingly, IL-4 has also been reported to skew macrophage differentiation from pro-inflammatory, anti-tumor M1 cells to tumor-promoting M2 phenotypes, creating an immune-suppressive environment and promoting angiogenesis. Taken together, the research paints a conflicting picture of IL-4 as both a cancer-fighting and cancer-promoting agent. But the evidence consistently points to IL-4 being a key signaling molecule in both immune cell and brain cell function. Perhaps IL-4 (and its associated receptor, IL-4R) would make good targets for treating GBM? With this in mind, Medicenna embarked upon a journey to turn GBM on its head and develop a revolutionary IL-4 – directed immunotherapy.
Medicenna’s most advanced clinical immunotherapy is MDNA55, a derivative of IL-4 (circular permuted IL-4, “cpIL-4”) that is linked to a lethal cytotoxic payload. This payload is the key to the innovation, consisting of the catalytic domain of Pseudomonas Exotoxin A (a toxin produced by a bacterium that inhibits protein synthesis, resulting in cell death). MDNA55 is highly selective for the IL-4 receptors (IL-4R) which are only expressed in brain tumors, allowing it to differentiate between healthy brain cells and cancerous targets. When MDNA55 binds to the tumor’s IL-4R it “unblinds” the tumor cells to the body’s immune system and blares the horn signaling attack. This anti-tumor activity lasts well after MDNA55 is cleared from the body, demonstrating a “memory effect” which boosts its duration of efficacy. In Medicenna’s 32 patient Phase 2b study, patients with “high levels” of IL-4R expression treated with MDNA55 experienced over 100% improvement in survival when compared to the synthetic control arm: 15.8 months v. 7.0 median overall survival (mOS) (Fig 4). Expanding the study to 44 patients to include those with “low levels” of IL-4R revealed an improvement of 61% in mOS. Importantly, safety was examined at 1.3x the proposed highest dose (180mg) in a large study (n=118), and the results clearly showed that MDNA55 is well-tolerated when injected directly into the GBM tumor and does not result in any toxicity or drug-related adverse events. Taken together, this data indicates that MDNA55 has the potential to benefit all GBM patients treated with a high dose (180mg) regardless of their IL-4R expression levels.
"Currently there are no approved therapies for rGBM that can extend survival by 50%, let alone by 70 - 100% as seen with MDNA55 after just one treatment. The data presented here reinforces our conviction that MDNA55 is an important player in glioblastoma and is a promising treatment option for this devastating disease."
Medicenna’s lead program MDNA55 has produced promising Phase 2b clinical trial results has been granted fast-tracked approval due to the great clinical need for a treatment and the rarity of GBM. Medicenna intends to discuss the results of their Phase 2b study with the FDA in the third quarter of this year. The FDA’s feedback will be crucial in designing a pivotal Phase 3 trial (if needed… see “Investment Considerations” below).
Investing in clinical-stage biotech is not for everyone. The risk is high. The reward is higher. Participating in the development of novel, groundbreaking drug development is a thrill, and waking up to the release of clinical data that advances the regulatory approval process is like scratching off a winning lottery ticket. It is not unreasonable to expect exit multiples of 10-20x (the average multiple for the 8 largest exits in 2018 was 14.5x the valuation at IPO). Seasoned investors know the game, but with the recent abundance of opportunities to invest in early-stage research and development, I believe that every investor must consider specific criteria before making an investment decision:
Medicenna’s core management team is comprised of Fahar merchant, PhD, President and Chief Executive Officer, Elizabeth Williams, CPA, CA, Chief Financial Officer, Rosemina Merchant, MESc, Chief Development Officer, and Martin Bexon, MD, Head of Clinical Development. Combined, the C-level suite has almost 75 years’ experience in biopharma corporate development, financing experience (including working with publicly listed entities in both the US and Canada), research and development of biopharmaceuticals, and regulatory experience in early and late-stage clinical development in oncology. This core management group is supported by a Board of Directors that brings expertise in the regulatory and commercialization process of clinical-stage drug assets. In my opinion, the management team is well-equipped to see their drug development program through clinical trials and to an exit opportunity.
In 2016, Medicenna completed its initial seed funding round with approximately CDN $10M and was awarded a $14.1M US grant by the Cancer Prevention and Research Institute of Texas (CPRIT). These funds were quickly deployed to advance their lead drug candidate for GBM, MDNA55, into Phase 2 clinical trials and strengthen their Superkine platform with prosecution of additional patents. These early successes allowed the company to attract top talent through the recruitment of Dr. Martin Bexon, Patrick Ward, and Elizabeth Williams to round out the C-level suite. Advancement of their next generation “Empowered Cytokines program was accelerated via a collaboration with MD Anderson Cancer Center to develop their IL-4 fusion protein for treating GBM.
In Q1 2017, the company began trading on both the Toronto Stock Exchange and TSX Venture Exhange after a successful private placement of $4M.
In April of 2017, Medicenna treated its first GBM patient with MDNA55 in a Phase 2b trial using an innovative drug delivery technology from Brainlab for precision tumor targeting. While the Phase 2 GBM trials for MDNA55 were underway, the company simultaneously pursued its IL-2 variant development platform (MDNA109) and announced its IL-2 variant, MDNA11, at the 6th Annual Immuno-Oncology Summit. The results of the MDNA55 Phase 2b and MDNA11 preclinical trial in solid tumors were made public in February of 2019 and were met with a very positive reception. These interim results were presented at a number of industry conferences attended by key opinion leaders in the field.
Medicenna announced completion of enrollment of its MDNA55 Phase 2b study for GBM in April of 2019, and presented its preliminary top-line results at the Immuno-Oncology Pharma Congress. While the hype for MDNA55 was growing, the company presented its preclinical results for MDNA11 and received an additional $1.9M in non-dilutive grant funding by CPRIT. The clinical success of both MDNA55 and MDNA11 allowed the company to continue to accrue top talent and raise capital in the public markets ($6.9M raised in a public offering in October 2019). Funds were used to accelerate the preclinical development of MDNA11 and clinical trials of MDNA55.
The company has continued to publish positive preclinical and Phase 2 results and expects to enter Phase 1 trials for MDNA11 for the treatment of solid tumors in H1 2021, and will discuss their Phase 2b results for MDNA55 for the treatment of GBM with the FDA (see “Regulatory Risks” section).
Medicenna regards its intellectual property rights as one of the foundation blocks upon which it continues to build a successful biopharmaceutical development company. Medicenna has established a strong and defensive intellectual property position to protect its proprietary technologies. To date, the company has 16 patent families providing protection in the US and in contracting states to the Patent Corporation Treaty. The company has a total of eleven issued patents and several patent applications pending in the United States, as well as a number of granted and pending applications for their MDNA55 and MDNA11 drug development programs worldwide. Expiry dates for the patents and related family members range from 2031 to 2039. Medicenna has Biologics Data Exclusivity for the above programs in the United States (12 years), Europe (10 years), Canada (8 years) and in other markets where similar means of exclusivity are available. Additionally, MDNA55 has market exclusivity via Orphan Drug Designation in the United States (7 years) and Europe (10 years) for the treatment of GBM, as well as, Biologics Data Exclusivity in the United States (12 years), Europe (10 years), Canada (8 years) and other markets where similar means of exclusivity are available.
IL-2 therapies are hot, and the market is eager to replace Proleukin (IL-2) as a treatment for solid tumors. The global market for solid cancer treatment was $121.3B in 2018 and is expected to reach $426.6B by 2027. Even a 1% market capture would make Medicenna’s MDNA11 a $4B drug. While Medicenna’s MDNA11 IL-2 variant is in a class of its own, there are a number of cutting-edge treatments for solid tumors in various stages of clinical development (see table below). To our knowledge Medicenna is the only IL-2 product in development which significantly reduces CD25 binding while also increasing CD122 binding to enhance potency and efficacy. In addition to these benefits, MDNA11 also has an increased half-life to allow for dosing every 2 or 3 weeks.
The M&A landscape for cytokine therapies looks very promising. Nektar Therapeutics entered into a $3.6B deal in 2018 with Bristol-Meyers Squibb (BMS) for its lead drug candidate “NKTR-214”. BMS intends to test NKTR-214 in combination with its immune checkpoint inhibitor, Opdivo, in multiple solid tumors. In May 2020 they presented a Phase 1 dose escalation study. A great deal of buzz surrounds these combination trials with Big Pharma. In January 2020, Sanofi acquired Synthorx, a clinical stage immuno-oncology company with a lead IL-2 program “THOR-707", for $2.5B. Sanofi intends to test this IL-2 drug in combination with their immune checkpoint inhibitors.
Medicenna’s MDNA55 immune therapy for GBM has the potential to disrupt an over $2B market, but faces fierce competition (see table below). Luckily, none of these competitors are pursuing IL-4R as a target. Therefore, Medecinna has the potential to bring a “first-in-class” immune therapy for treating GBM to the market.
There are a number of significant milestones that have a high-probability of being achieved between now and end of 2021. Medicenna’s drug development pipeline is diverse and clinical trial data is constantly being generated for both its suite of Superkines and MDNA11 and MDNA55 lead drug candidates.
Medicenna’s most advanced drug development program, MDNA55 for the treatment of GBM, has already secured fast-tracked approval since GBM is an orphan disease with limited treatment options. The FDA’s recommendation for approving MDNA55 for clinical use will largely be determined by (1) their familiarity with the IL-4R targeting / payload delivery technique and toxin and (2) clear results demonstrating the superiority of MDNA55 compared to historical real-world outcomes.
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