Waking a Sleeping Giant... Cancer Beware

Thirty-thousand foot perspective

Biovaxys has 3 concurrent clinical-stage immunotherapeutics under development for COVID-19, ovarian cancer, and melanoma:

• ‍BVX-0320 - a provisional patent application for the Haptenized SARS-CoV-2 Spike Protein Vaccine has been filed (3/20/20) and the manufacturing protocol for non-GMP quantities of BVX-0320 has been finalized. Biovaxys has already conducted a small animal tolerability and T-cell activation study to confirm the safety of BVX- 0320 in animals and the bioactivity (T-cell activation) of the drug.
• ‍BVX-0918A vaccine for ovarian cancer is based on the OVax® therapy developed by Avax (Fig 1 in the article).
• BVX-0918B a variation of the BVX-0918A vaccine for ovarian cancer, based on the MVax® therapy developed by Avax (Fig 2 in the article).‍

Biovaxys technology is superior to the state-of-the-art because it employs:

• “Bi-haptenization” – Biovaxys is the only immune-oncology company utilizing two haptens attached to the patient’s own tumor cell to enhance the immune response, increasing the likelihood that the immune system recognizes and destroys the cancer that the vaccine is directed against.‍
• Anti-CTLA3 and Anti-PDA antibody combination therapy- Biovaxys’ novel strategy involves combining immune “checkpoint inhibitor” antibodies (anti-CTLA3 and anti-PDA) to remove the “brakes” on the immune system that tumors exploit to evade detection and destruction by the immune cells. This therapeutic strategy hits the                        tumor with a 1-2 punch.‍
• Simplified Manufacturing and de-risked regulatory - Biovaxys’ manufacturing process for vaccine development is extremely well-defined, involving 4 simple steps.
• Scalable platform - Biovaxy’s platform is highly-scalable and customizable for many other pathogens and diseases (which is one of the reasons that they are undervalued at this stage in their lifecycle). Haptenized protein technology is well-established and proven in the clinic, and Biovaxy’s unique approach to “bi-haptenize”  cancer antigens to deliver more potent, targeted vaccines can be used to address many other viruses and cancers.

Biovaxys benefits from:

• clearly-defined drug development trajectory and upcoming catalysts‍
• a tight share structure and insider ownership
• an experienced management team who hailed from Avax Technologies, the pioneer of haptenized antigen cancer vaccines
• a strong patent portfolio and significant barriers to entry
• a large market for cancer vaccines ready for disruption

Background

Anti-viral and anti-cancer vaccine development

The goal of a vaccine is to elicit an in vivo (i.e., within an organism) immune response to an invading pathogen. More specifically, the vaccine “primes” the immune system by presenting a specific piece of the virus (a protein “antigen") to specialized immune cells  (called “B-cells and T-cells”) that produce antibodies to target and eliminate the foreign pathogen[1]. Antiviral vaccines have been extremely successful in preventing the spread of deadly viruses and in some cases eradicating the disease all-together (e.g. Smallpox, polio). Technologic advances in human monoclonal antibody identification and production has enabled researchers to create new vaccine platforms against viral pathogens for which no treatments exist[2].

The potential for vaccines to treat cancer has been explored over the last 30 years. Conceptually, an anticancer vaccine functions just like an antiviral: the vaccine primes the body’s immune system to recognize cancerous cells and, in a highly-specific manner, eliminate them.  Unfortunately, the development of anticancer vaccines has not been straightforward, and many issues must be addressed, such as antigen-specificity, delivery methods, combination immunotherapies, and issues surrounding the tumor “microenvironment” and immunosuppression. Identification of tumor-specific antigens is extremely important to ensure that the vaccine directs cytotoxic (“cell killing”) immune cells directly to the tumor and away from normal, healthy cells. Once a suitable antigen is selected and an immune response induced, the immune cells must be able to reach the tumor site and perform their function without inhibition. Improving t-cell access into the tumor and combating the immunosuppressive tumor microenvironment are critical aspects to developing a successful anticancer therapy[3].

“Antigens” and “Haptenization”

Haptens are small molecules that encourage an immune response when attached to a larger “carrier” protein, such as a viral protein (antigen) that has been selected for vaccine development. “Haptenized” proteins have been extensively studied and are essential in immunology and the development of monoclonal antibodies. In the context of developing antiviral or anticancer vaccines, a hapten “teaches” the patient’s immune system to recognize and target a virus or tumor by making the hapten-modified (“haptenized”) antigen more “visible” to the immune system(more so than if the antigen alone was presented to the immune system).Upon recognition of the haptenized antigen delivered by vaccine, the body mounts an immune response and produces T-cells that target and clear the infected or cancerous cells. The beauty of haptenized vaccine development is that it is a scalable platform for any virus or cancer cell and is based on established science and a well-understood mechanism of action.

Waking Up the Human Immune System

De-risked development

Biovaxy’s antiviral and anticancer vaccine development platform is an extension of the protein haptenization and vaccine development efforts by Dr. David Berd, Chief Medical Officer of Avax Technologies (while at Thomas Jefferson University). Avax technologies invested over $100M in research and development of haptenized antigens for antiviral and antitumor vaccine development and patented the MVax® and OVax® vaccines for melanoma and ovarian cancer, respectively. Both vaccines were in clinical trials but were halted for financial reasons, but not before promising clinical data was generated (see Ovarian Cancer and Melanoma sections below). Biovaxys licensed the Avax vaccine development with the mission of enhancing the core technology through state-of-the-art protein chemistry and leveraging the core science of the existing platform to expand their drug development pipeline. The legacy of haptenized vaccines is well-established, and the positive Phase 1/2 data for MVax®/OVax® are a testament to the safety, efficacy, and clinical study design and manufacturing protocols of the haptenized tumor cell vaccine development platform.

Drug development pipeline

Biovaxys has 3 concurrent clinical-stage immunotherapeutics under development for COVID-19, ovarian cancer, and melanoma. Learn more about the FDA approval process.

Antiviral vaccines

COVID-19

COVID-19 is the resultant disease from infection with the SARS-CoV-2 virus. Over 25.5 million infections and 852,000 deaths can be attributed to the pandemic, and there are ~6M infections and 185,000 deaths in the US alone. Over 150 vaccine candidates are in exploratory and preclinical development, including DNA, live attenuated virus, non-replicating viral vectors, and protein/RNA vaccines, however there are no vaccines or approved curative therapies available (although many are under development, and remdesivir and convalescent plasma therapy has been allowed by the FDA for use).

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BVX-0320 is a haptenized s-Spike protein of the SARS-CoV-2 virus, which is the portion of the virus that allows for entry into human cells. The s-Spike protein contains a region that is highly-variable between other SARS viruses, and therefore serves as a specific antigen to target by the immune system. Two recent studies have demonstrated that patients recovering from SARS-CoV-2 infection carried helper T-cells that recognized the SARS-CoV-2 S-spike protein, and virus-specific killer T-cells were detected in 70% of the test subjects[4],[5]. As haptenized proteins are known to induce potent T cell responses, BioVaxys’ approach could have an advantage over other SARS-Cov-2 vaccines in development. Furthermore, the company’s clinical experience with haptenization and safety data from prior clinical development (Avax Phase 1/2 clinical studies) of haptenized vaccines may prove advantageous from a regulatory perspective and lead to an accelerated development process.

BVX-0320 Progress

So far, a provisional patent application for the Haptenized SARS-CoV-2 Spike Protein Vaccine has been filed (3/20/20) and the manufacturing protocol for non-GMP quantities of BVX-0320 has been finalized. Fortunately, the manufacturing cost is low due to the simplicity of the haptenization process and characterization of the Spike-protein.

Biovaxys has already conducted a small animal tolerability and T-cell activation study to confirm the safety of BVX-0320 in animals and the bioactivity (T-cell activation) of the drug.

BVX-0320 Development Plan

Game-changer for COVID-19 screening

Current COVID-19 diagnostics are built around SARS-CoV-2 antibody detection and are fraught with positive and negative false positives due to the sensitivity and specificity of the tests. Biovaxys’ approach leverages their understanding of immune cell activation to determine whether SARS-CoV-2-specific T-cells have been created by the body’s immune system as a result of exposure to the virus. The production of inflammatory T-cells develops within 24 to 72 hours after skin exposure to the SARS-CoV-2 s-Spike protein, and the degree of inflammation is indicative of the degree of T-cell activation. This novel approach has the potential to be much more accurate than any antibody test on the market, and actually informs the patient about the degree of infection. Biovaxys’ disposable “skin prick” COVID-19 is protected by a provisional patent filed in October of 2020. Read more here.

Cancer vaccines

BioVaxys’s cancer vaccines are created by extracting a patient’s own (e.g. ‘autologous’) cancer cells, chemically treating them with a hapten, and re-injecting them into the patient to induce an immune response to cancer antigens which are otherwise not immunogenic.  Haptenization is a well-known and well-studied immunotherapeutic approach in cancer treatment and has been clinically evaluated in both regional and disseminated metastatic tumors. A first generation single-hapten vaccine achieved positive immunological and clinical results in Avax’s Phase I/II trials. Single haptenization only modifies hydrophilic amino acids on antigenic proteins but utilizing two different haptens modifies both both hydrophilic and hydrophobic amino acids on these target proteins, making the protein more visible to the immune system.  A greater number of T cells is activated by the addition of the second hapten (“bi-haptenization”), so the intensity of the immune response directed against the cancer increases. Biovaxys has enhanced the single haptenization approach to now utilize two haptens, which they believe will yield superior results.

Ovarian cancer

Ovarian cancer is an extremely fatal disease (3x that of breast cancer) that affects ~300,000 women worldwide per year. It is considered the deadliest gynecologic malignancy in developed countries, and the majority of stage 3 and 4 disease will ultimately be recurrent and resistant to chemotherapy. It is clear that new treatment modalities are needed.

Biovaxys’ BVX-0918A vaccine for ovarian cancer is based on the single-hapten OVax® therapy developed by Avax (Fig 1).

Melanoma

Melanoma is a form of skin cancer that is highly malignant and deadly if not caught early. There are an estimated 196,000 cases of melanoma in the US in 2020. Current treatment options include surgical removal, immunotherapy, targeted therapy, chemotherapy, and radiation.

Biovaxys’ BVX-0918B a variation of the BVX-0918A vaccine for ovarian cancer, based on the single-hapten MVax® therapy developed by Avax (Fig 2).

Biovaxys’ Advantage

Advances in cancer immunotherapies have revealed the necessity of combination therapies to combat the disease robustly and comprehensively. Broadly, immunotherapies can be grouped into checkpoint inhibitors, antigen-specific monoclonal antibodies, and receptor engineered T-cells. Alone, each of these therapies may have limited efficacy due to the complexity of cancer physiology and the surrounding tumor microenvironment (which actively suppresses the immune response), but together can synergistically work to improve the targeted immune response.

Bi-haptenization

Two haptens attached to the patient’s own tumor cell antigen enhances the immune response, increasing the likelihood that the immune system recognizes and destroys the cancer that the vaccine is directed against. The haptenization process involves the isolation of the patient’s tumor cell, identification of a protein antigen present on the surface of the tumor cell, and a simple “haptenizing” chemical reaction that adds the hapten chemical group to the antigen.

Anti-CTLA3 and Anti-PDA antibodies

Immune “checkpoint inhibitors” remove the “brakes” on the immune system that tumors exploit to evade detection and destruction by immune cells. Antibodies have been designed to inhibit these checkpoints, but their use as a standalone treatment has not been very successful. Biovaxys’ strategy involves combining these checkpoint inhibitor antibodies with their vaccines to hit the tumor with a 1-2 punch.

To this end, Biovaxys plans to combine the use their anticancer vaccines with anti-CTLA4 and anti-PDA checkpoint antibodies. The rationale is that these reagents on their own are powerful augmenters of cellular immune response and combined with Biovaxys’ vaccines the cocktail should elicit synergistic anti-cancer effect.

Simplified manufacturing and de-risked regulatory

Biovaxys’ manufacturing process for vaccine development is extremely well-defined, involving 4 distinct steps:

• Tumor acquisition
• Tumor processing and vaccine production(identification of cancer antigen, haptenization of the antigen)
• Quality control (sterility, endotoxin, identity, potency) of each batch
• Frozen storage (liquid nitrogen)

Scalable platform

Biovaxy’s platform is highly-scalable and customizable for many other pathogens and diseases (which is one of the reasons that they are undervalued at this stage in their lifecycle). Haptenized protein technology is well-established and proven in the clinic, and Biovaxy’s unique approach to “bi-haptenize” cancer antigens to deliver more potent, targeted vaccines can be used to address many other viruses and cancers. Additionally, Biovaxys intends to collect and “bank” immune cells (T-cells) from patients pre- and post- vaccination to create a repertoire of tumor antigen-specific T-cells with enhanced activity via CRISPR/Cas9 gene editing.

Investment Considerations

MedicalGold’s analytic framework

When researching an investment opportunity in early-stage biotech, we look for:

• stock that is flying under the radar at a suppressed valuation
• a well-defined trajectory and clear catalysts over the next 6 to 12 months
• a tight share structure and ownership by insiders/management (skin in the game is crucial regardless of market sector)
• seasoned management with a track record of success in raising capital, preclinical and clinical-stage research, and corporate development in the biopharma space
• a defensible patent portfolio and other barriers to duplication
• the ability to disrupt a growing market segment with state-of-the-art innovation

Trajectory and catalysts 

Tight share structure and insider ownership

Experienced management

Founders and C-level management all hail from prior experience in founding, funding, or leading R&D at the former Avax Technologies. They have decades’ worth of experience in immunotherapeutic R&D and biotech corporate and commercial development, with ties to institutional capital and Key Opinion Leaders in the field. Notably, James Passin, Co-Founder and CEO, is a former hedge fund and PE fund manager, and a long-term biotech investor. Kenneth Kovan, Co-Founder, President & COO, is a former biotech CEO, and has over 30 years of experience in biopharma commercialization and corporate development. David Berd, M.D., the inventor of both Biovaxys cancer vaccines, is a medical oncologist and tumor immunologist who has experience in clinical oncology research and has published over 85 papers on the subject. In addition to his academic research, Dr. Berd has 10 issued patents dealing with cancer vaccines. As National Director for Immunotherapy at Cancer Treatment Centers of America, Dr. Berd investigated the application of the AC vaccine to ovarian cancer and is a highly-respected medical doctor and academic researcher in the oncology community.

James Passin | Founder, Chief Executive Officer and Director

• Former hedge fund and private equity fund manager at FGS Advisors, LLC, an affiliate of New York-based Firebird Management LLC.
• 20 years of experience as a professional investor, developing venture-stage companies, and directed and managed over $155 million of equity and debt investment into biotech companies including Avax Technologies, Inc.
• He is a director of several public companies, including TraceSafe Inc. (CSE: TSF) and BDSec JSC  (MSE: BDS), is a Chartered Market Technician and member of the CMT Association.

Kenneth Kovan | Founder, President and Chief Operating Officer

• Over 30 years of experience in biopharmaceuticals commercial development.
• Founder of biotechnology companies including the former Avax Technologies, Inc.
• Background includes technology transfer with Thomas Jefferson University, Strategic Marketing with GlaxoSmithKline, and Global New Product Development with Wyeth-Ayerst Pharmaceuticals.
• Therapeutic experience includes infectious disease, antivirals, oncology, vaccines, cell/gene therapy, and gene editing.

David Berd, M.D. | Founder and Chief Medical Officer

• Medical oncologist with a lifelong record of clinical research in medical oncology and cancer immunotherapy.
• Cofounder of cancer immunotherapy company AVAX Technologies, is the inventor of the cancer vaccines MVax™ and OVax™, and served as Chief Medical Officer 2005-2008.
• Former professor of Medicine at Thomas Jefferson University, where for 20 years he conducted clinical research on melanoma immunotherapy. He also spent nine years as a research physician at Fox Chase Cancer Center.
• Published more than 85 original papers in numerous medical journals, ten issued patents dealing with cancer vaccines.

Lachlan McLeod, CPA | Chief Financial Officer

• 6 years of experience focusing on financial reporting under IFRS, governance for public companies, and technical accounting issues, including work as an auditor at KPMG.
• Mr. McLeod currently works as a Senior Consultant at Fehr & Associates CPA, which provides external consulting and accounting services.

Jeremy Poirier | Director

• 15+ years’ experience in the capital markets.
• Co-founder, former director & officer of Pure Energy Minerals Limited (TSXVX: PE).
• Former CEO of Bearing Lithium (CSE: BLILF); Led transformation of the company through the acquisition of Li3 Energy and facilitated a number of over-subscribed capital raises.
• Strong network of investor and industry contacts, served on a number of boards, and held senior officer positions at several public and private companies.

William Timothy Heenan | Director

• A founder of Mirasol Resources Ltd. and a former director of Mirasol for over 12 years since its inception and listing on the TSX Venture Exchange.
• Highly experienced in legal, corporate and administrative matters.
• A director of Bearing Lithium Corp., a public company listed on the TSX Venture Exchange.

Patents and barriers to entry

Biovaxs’ patent portfolio encompasses their proprietary haptenization process (#62/992,722 filed 3/20/2020), the composition of matter and methods of use for autologous cancer vaccines in combination with immune checkpoint inhibitors (#62/735,381 filed 9/24/2018 and #62/746,066 filed 10/16/2018), and a diagnostic for identifying the T-cell immune response to SARS-CoV-2 infection.

The company has licensed two additional patents from Thomas Jefferson University encompassing the composition of haptenized tumor cells and extracts, the methods for preparing the extracts, the vaccines comprising haptenized tumor cells, methods for treating cancer with the aforementioned vaccines (Issued US patent # 7,297,330), and the cryopreservation of haptenized tumor cells (Issued US patent # 8,435,784).

Market and innovation

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. Biovaxys’ cancer vaccine development platform is being optimized for ovarian cancer and melanoma (and COVID-19) but is extendable to any cancer that can be isolated from the human body. The company has developed a scalable platform that relies on their proprietary knowledge of haptenization of cancer antigens and the preparation of those haptenized antigens into vaccines.

MedicalGold’s Analysis

Biovaxys is a unique opportunity in that their drug development platform is predicated on a proven technology that has positive clinical data. The Founders of Biovaxys were former C-level management of Avax Technologies, the inventors of the single-hapten vaccines OVax® and MVax®. Biovaxys’ value-add lies in their bi-haptenization and dual-treatment approach to increasing the immune response to cancer vaccines. In our minds, the company’s technology is significantly de-risked given the prior clinical trial success of Avax’s “first-generation” hapten vaccines. So why did Avax fail taking their vaccine development platform to market? The simple answer is that they ran out of money and could not afford to continue to finance the massive amount of debt encumbering their balance sheet. The most efficient way to move forward was to dissolve the company and re-incorporate under a new structure predicated on the OVax® and MVax® technologies.

Biovaxys ticks off all our criteria for a successful biotech venture. The management is stacked with senior industry experts spanning corporate development, regulatory, and research and development. The technology has the potential to disrupt an enormous market. The real beauty of the technology is that it is a scalable platform. The process of creating a haptenized cancer vaccine is well-established and can be used to develop a vaccine for any cancer that can be isolated from a patient’s body. Personalized medicine is the future, and Biovaxys is on the forefront of this innovation. The technology is protected by a sound patent portfolio and the company intends to continue to prosecute additional divisional patents to create an airtight seal around their drug development program. Additional barriers to entry exist due to the technical expertise needed to manufacture the technology (which is also protected by a patent). Ultimately, Biovaxys benefits from the >$100M of research and development that Avax spent creating the haptenized vaccine platform.

Finally, the million-dollar question is whether the company is currently undervalued and has a high probability of hitting valuation-increasing milestones in the near future. We believe that the company has a high probability of technical and regulatory success with their well-defined trajectory towards FDA approval for the 3 vaccines in development. There is a strong possibility of near-term revenue potential via a compassionate use protocol for COVID-19 and out-licensing the T-cell biobanking platform. The company is currently valued at ~$30M CAD ($23M USD). Recent transactions indicate that clinical-stage cancer vaccine companies trade at enormous premiums to their pre-acquisition market values:

• GSK’s acquisition of Swiss-based Okairos for $325M in 2013
• Sanofi’s acquisition of Synthorx for $2.5B in 2019
• Boehringer’s acquisition of Swiss-based Amal Therapeutics for $325M in 2019
• Merk’s acquisition of Immune Design for $300M in 2019
• Gilead’s acquisition of Immunomedics for $21B in Sept 2020 (100% premium to current market value)

References

[1] https://www.frontiersin.org/articles/10.3389/fimmu.2019.00008/full

[2] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3821995/pdf/nihms500411.pdf

[3] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6349827/

[4] https://www.cell.com/cell/fulltext/S0092-8674(20)30610-3

[5] https://www.medrxiv.org/content/10.1101/2020.04.17.20061440v1

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Disclosure

Author owns BIOV.CA shares at the time of publishing and may choose to buy or sell at any time without notice. Author has been compensated for marketing services by Biovaxys Technology Corp.