StemCell Therapy

Jounce Therapeutics (NASDAQ:JNCE) is a biotech that should be on your radar in the coming weeks. That's because it is set to present new data from the ICONIC trial for its vopratelimab drug to treat patients with advanced solid tumors. This presentation will pretty much show why an RNA signature was selected to become a predictive biomarker for the potential of improved clinical outcomes in cancer patients. With such data on hand, there is an ability to initiate the phase 2 SELECT study in 2020 to use vopratelimab in combination with its other PD-1 inhibitor product known as JTX-4014. Besides this mid-stage SELECT study, there is another trial ongoing known as EMERGE. Both of these studies provide shots on goal for the monoclonal antibody of vopratelimab. A few catalysts in 2020 could help boost the value of the stock.

Why I believe that Jounce Therapeutics is a good speculative biotech is because of its approach to using a predictive RNA signature biomarker to potentially help increase clinical response rates in patients with certain types of cancer. I am taking the stance that future immunotherapy products are leaning more towards biomarker targeted drugs. That's why Jounce intends to initiate a phase 2 study with vopratelimab in mid-2020 known as SELECT. The basis of this study is that a predictive RNA signature biomarker will help choose only those patients who are to likely respond to treatment. I'm not bullish on this speculative biotech only because of the predictive biomarker approach being deployed in this study. It is also because along with the use of vopratelimab, Jounce intends to add into the mix its mid-stage ready PD-1 inhibitor asset known as JTX-4014. The data to be presented at the ASCO-SITC 2020 conference, taking place between February 6th through the 8th, will display the biomarker RNA signature of ICOS hi CD4 T-cells to be described below. Specifically, from the ICONIC study. What's the rational reason for deploying such a study? That's because in a prior phase 1 study, known as ICONIC, it was shown that patients were able to show a benefit against multiple measures when using vopratelimab alone or in combination with another PD-1 inhibitor known as Opdivo (nivolumab). Such positive measures observed were:

The main mechanism of action for vopratelimab (monoclonal antibody) is that it binds to T-cells and activates "Inducible T-cell Co-Stimulator", thus the name ICOS. ICOS is a protein that is found on the surface of certain T-cells. What's important to note, which is shown above, is that ICOS only activates what is known as ICOS hi CD4 T-cells. These ICOS hi CD4 T-cells are the predictive biomarker to be deployed for the SELECT study. This brings up another point in that vopratelimab only engages CD4 T-cells and not CD8 T-cells. Why is that important? That's because CD4 T-cells are known to elicit a more robust response, while CD8 T-cells are not as keen. One other fact is that CD4 T-cells are known as helper cells, and they stimulate other immune cells in the body. They offer an adaptive immune response in both helping suppress and/or regulate immune responses. The initiation of the phase 2 SELECT study will be an important milestone for Jounce, which I believe will be a catalyst for the stock. The presentation of biomarker data at the ASCO-SITC 2020 conference will act as another catalyst. The mid-stage SELECT study will be initiated in mid-2020. From there, interim results from this study won't be released until 2021.

There is another shot on goal with the use of vopratelimab. This is a phase 2 study known as EMERGENCE, which had already been initiated in June of 2019. What's different about the EMERGENCE study is that it doesn't include a biomarker like the phase 2 SELECT study noted above. In other words, this is more of a broad approach to treating patients with cancer. Having said that, it doesn't get away from the main mechanism of action of vopratelimab, which is inducing ICOS hi CD4 T-cells to kill cancer cells. This phase 2 EMERGENCE study is going to be using the combination of vopratelimab + Yervoy (ipilimumab). Wait a second, why the need for Yervoy to be incorporated into this study? That's because Yervoy is an anti-CTLA4 inhibitor. It attaches to cancer cells and inhibits the CTLA4 response, which in essence helps boost the immune response against target cancer cells. There is another item that Yervoy does which is crucial and lines up with the mechanism of action of vopratelimab. It also induces ICOS hi T-cells like vopratelimab. Thus, the two products together each have a goal in this study:

So Yervoy acts like the launcher of inducing ICOS hi, and then vopratelimab is responsible for increasing such activity and then letting it sustain for a longer period of time. I believe such a mechanism has the chance to exhibit a more sustained durable response for cancer patients. This phase 2 study is being tested in patients with non-small cell lung cancer (NSCLC) and urothelial cancer. It is expected that efficacy and biomarker data from the EMERGE study will be revealed by the 2nd half of 2020.

According to the 10-Q SEC Filing, Jounce Therapeutics had cash, cash equivalents and investments of $185.1 million as of September 30, 2019. The company believes that it will have a gross cash burn between $80 million and $95 million for 2020. The company believes it has enough cash on hand to fund its operations into the second half of 2021. In my opinion, this is just an estimate. I think that once it initiates the phase 2 SELECT study, along with possibly advancing other early-stage studies, it is possible that the gross cash burn rate could increase. Another possible scenario is that it may choose to raise cash after positive data is released. When a company's stock trades higher on the back of positive clinical data, biotechs tend to take advantage with an immediate cash raise.

While some good preliminary data came from the phase 1 ICONIC study using vopratelimab in solid tumors was achieved, it is important to note that it is still in early-stage studies. There is no guarantee that the biomarker data to be presented at the ASCO-SITC 2020 conference is going to be highly positive. If that's the case, then it could be a non-event type of a catalyst. The other phase 2 studies noted above, EMERGE and SELECT still have a way to go before data is released for either of those. As for the EMERGE study, clinical data is not expected until the second half of 2020. The SELECT study has yet to be initiated and is not expected to begin until mid-2020. This means that in the short-term, it's quite possible that the stock could trade lower until such data is revealed.

Jounce Therapeutics is looking to take a differentiated approach with the use of its monoclonal antibody vopratelimab. As I laid out above, both phase 2 studies shown above will have one thing in common. That is the mechanism of action of vopratelimab in being able to induce ICOS hi T-cell responses to improved multiple measures in patients with cancer. One approach is to use Yervoy in combination with vopratelimab to accomplish this task. The other approach in the SELECT study is the use of a biomarker (ICOS hi T-cell population to benefit from treatment) and the addition of Jounce's very own PD-1 inhibitor JTX-4014. I believe that Jounce Therapeutics has a good shot to increase clinical outcomes for several cancer patient populations. Thus, I view it as a good speculative buy.

This article is published by Terry Chrisomalis, who runs the Biotech Analysis Central pharmaceutical service on Seeking Alpha Marketplace. If you like what you read here and would like to subscribe to, I'm currently offering a two-week free trial period for subscribers to take advantage of. My service offers a deep-dive analysis of many pharmaceutical companies. The Biotech Analysis Central SA marketplace is $49 per month, but for those who sign up for the yearly plan will be able to take advantage of a 33.50% discount price of $399 per year.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Originally posted here:
Jounce Should Be On Your Radar With Differentiated Approach To Activating Immune System - Seeking Alpha

This entry was posted on January 30, 2020 at 3:42 pm and is filed under Immune System. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed. |