In an oral presentation at SITC, new results from Cohort A of the Phase II NSCLC trial with BerGenBio’s selective AXL inhibitor bemcentinib and pembrolizumab confirms the potential of the combination. 90% of the 44 evaluable patients in the cohort had PD-L1 low/negative tumours, and yet the objective response rate (ORR) was 25%; <10% would have been expected with pembrolizumab monotherapy. In those patients, who were AXL+ using a new composite score, the ORR was 33% compared to 7% in those classed as AXL-. Cohort A is in immuno-oncology (IO) naïve patients, and there are also two other cohorts in IO-refractory patients ongoing, the results of which will determine the design of the randomised Phase II study planned to start in 2020. We maintain our valuation of BerGenBio at NOK3.21bn (NOK53.13/share).
| Year-end: December 31 | 2017 | 2018 | 2019E | 2020E |
| Sales (NOKm) | 0.0 | 2.3 | 8.7 | 0.0 |
| Adj. PBT (NOKm) | (182.2) | (197.7) | (198.1) | (266.9) |
| Net Income (NOKm) | (182.2) | (197.7) | (198.1) | (266.9) |
| Adj. EPS (NOK) | (4.0) | (3.6) | (3.4) | (4.4) |
| Cash (NOKm) | 370.4 | 360.4 | 234.3 | 76.1* |
| EBITDA (NOKm) | (183.5) | (194.3) | (200.6) | (264.5) |
Update
19 November 2019
| Price | NOK16.98 |
| Market Cap | NOK1.04bn |
| Enterprise Value | NOK747m |
| Shares in issue | 61.1m |
| 12-month range | NOK11.50-32.80 |
| Free float | 60.6% |
| Primary exchange | Oslo |
| Other exchanges | N/A |
| Sector | Healthcare |
| Company Code | BGBIO |
| Corporate client | Yes |
Company description
BerGenBio is a clinical-stage, biopharmaceutical company based in Bergen, Norway and Oxford, UK. It is developing innovative therapies for aggressive cancers by way of inhibiting the AXL signalling pathway. The lead oncology compound, bemcentinib, is in multiple Phase II trials.
Analysts
Mick Cooper PhD
mcooper@trinitydelta.org
+44 (0) 20 3637 5042
Lala Gregorek
lgregorek@trinitydelta.org
+44 (0) 20 3637 5043
Dr Matthew Krebs, a principal investigator for the Phase II study in NSCLC with bemcentinib in combination with pembrolizumab, gave an oral presentation of the latest data from the trial, including new biomarker data, at the SITC (Society for Immunotherapy of Cancer) 2019 meeting. The growing body of data adds weight to the hypothesis that bemcentinib has the potential to significantly enhance pembrolizumab activity and become a valuable treatment in NSCLC.
A schematic of the clinical trial design of the Phase II study BGBC008 in NSCLC with bemcentinib in combination with pembrolizumab is summarised in Exhibit 1. The data presented at SITC 2019 was from Cohort A in immuno-oncology (IO) naïve patients. There are an increasing proportion of patients receiving PD-1/PD-L1 inhibitors in the first-line setting, which is why BerGenBio added Cohort B (previously treated with a PD-1/PD-L1 inhibitor, recruitment ongoing) and Cohort C (previously treated with PD-1/PD-L1 inhibitor in combination with platinum-chemotherapy, recruitment about to start) to the study. That said, the IO-naïve setting in second-line NSCLC could still be an attractive opportunity for bemcentinib as PD-1/PD-L1 inhibitors have limited efficacy in patients with PD-L1 low or negative tumours, approximately two thirds of NSCLC patients.
90% of patients in Cohort A had low or negative PD-L1 tumours (TPS<50%, Exhibit 2). Based on Merck’s Phase I KEYNOTE 001 and Phase III KEYNOTE 010 studies with pembrolizumab monotherapy in NSCLC, an ORR between 8% and 10%, and a mPFS between 2.1 months and 3.9 months would be expected without bemcentinib. For reference, patients with high PD-L1 tumours (TPS≥50%) in the KEYNOTE 010 trial achieved an ORR of 30% and mPFS of 5.2 months.
At the data cut-off point of 30 September 2019 for the SITC presentation, 44 of the 50 recruited patients were evaluable and nine patients were still receiving bemcentinib in combination with pembrolizumab.
Overall the ORR was 25% among the 44 evaluable patients (Exhibit 3), which is significantly higher than would be expected with pembrolizumab monotherapy, given the proportion of patients with PD-L1 low or negative tumours (as discussed above). The achievement of an ORR of ≥25% of evaluable patients also means that the Phase II study has formally met its primary efficacy endpoint.
In the 15 patients classed as being AXL+ using a new composite score, the ORR was 33% but only 7% with the 15 patients classed as being AXL-.
Previously, patients were classified as being AXL+ or AXL- based only on AXL expression within a tumour (using immuno-histochemistry, IHC); the new composite approach also takes into account AXL activity in myeloid immune cells (see below). In the data published at the WCLC (World Congress on Lung Cancer) 2019 meeting on 8 September, the ORR in the 15 AXL+ patients was 40% and 15% for the 13 AXL- patients, with the patients classified using the previous method (tumour-only AXL expression). The new classification system appears to identify those patients likely to benefit from treatment with bemcentinib with greater specificity, though this needs to be confirmed with prospective analysis.
Interestingly, the level of PD-L1 expression does not appear to correlate with better response rates, although the number of patients, especially those with PD-L1 high tumours, is limited.
The overall mPFS was 4.1 months (Exhibit 4), which again is better than what would be expected with pembrolizumab monotherapy. mPFS in the KEYNOTE 010 trial was 3.9 months, however 40% of the patients were PD-L1 high, 60% were PD-L1 low and there were no PD-L1 negative patients.
There is a clear separation of the Kaplan-Meier curves of PFS for patients classed as AXL+ and AXL- using the new composite system, with mPFS of 8.4 months and 2.9 months respectively. The mPFS in AXL+ patients is based on only 15 patients, but it compares very favourably to the 5.2 months observed in PD-L1 high patients in the KEYNOTE 010 trial.
Bemcentinib in combination with pembrolizumab continued to be well tolerated with no composite toxicity observed (Exhibit 5). The adverse event profile of the two drugs together still appears to be very similar to that seen with pembrolizumab monotherapy.
There were nine patients still on treatment at the end of September (time of data cut off for the presentation), so the data is still maturing and we expect more data from the trial to be reported in H120.
Previous biomarker analysis in the Phase II NSCLC trial had only focused on AXL expression in tumour cells. However, further analysis showed that, while there was a correlation between tumour AXL expression and responders, it failed to identify fully those likely to respond. Detailed analysis of gene expression of tumour tissue (including immune cells) showed that AXL expression (in tumour and immune cells), genes associated with the epithelial-mesenchymal transition (EMT) of tumour cells and activation of myeloid immune cells (eg. macrophages) were linked to a clinical benefit (Exhibit 6).
AXL is known to play important roles in the activation of both EMT (via Twist and Snail activation) and myeloid activation (including M2 macrophages via STAT1 signalling, see February’s Outlook note). Also, the two processes are linked to tumours evading immune surveillance. So, there is a strong scientific rationale for the tumours with EMT and myeloid activation gene signatures responding to treatment; bemcentinib overcomes immune escape of these tumours, allowing the cytotoxic T-cells without inhibition from PD-1 signalling to kill tumour cells.
Interestingly, other clinical studies are showing that a EMT gene signature, and AXL or TGF-β expression (produced by M2 macrophages) are associated with resistance to pembrolizumab treatment, such as the analysis of tumours samples from urothelial cancer patients in the KEYNOTE-052 study.
Slightly surprisingly, the expression of PD-L1 and IFN-γ were not predictive of a clinical benefit in the current NSCLC trial. PD-L1 is the main biomarker used to predict the likelihood of a patient benefiting from a PD-1/PD-L1 checkpoint inhibitor like pembrolizumab. Similarly, IFN-γ promotes a pro-inflammatory state within a tumour, in which cytotoxic T-cells are active, and has previously been shown to be predictive of a clinical response to PD-1 inhibition.
Based on this analysis, BerGenBio devised the new composite AXL score to identify patients likely to benefit from bemcentinib and pembrolizumab treatment. Precise details of the test have not been disclosed, but it takes into account AXL expression in both tumour and immune cells.
The composite AXL score needs to be validated as a companion diagnostic tool, which will be done during the planned, randomised Phase II study due to start in 2020 and subsequent Phase III programme. The utility of the composite AXL score will also be assessed during the prospective analysis of patients in Cohorts B and C of the current Phase II trial.
We continue to value BerGenBio at NOK3.21bn (NOK53.13/share) or $378m. BerGenBio’s share price has increased steadily by over 30% during the last three months; nevertheless our valuation still suggests the shares are materially undervalued. The next expected catalyst for the shares is the presentation of new data from the Phase II study in AML with bemcentinib in combination with LDAC (low dose cytarabine) at the ASH (American Society of Hematology) meeting on 7-10 December.
We have revised our expectations to reflect the Q319 results and its tight control of expenses, as indicated in Exhibit 7. The company had a cash position of NOK289.5m, which we estimate will allow the company to operate into Q420.
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