Ticker: HGEN
COMPANY OVERVIEW
Humanigen, Inc. is a clinical-stage biopharmaceutical company developing its portfolio of next-generation cell and gene therapies for the treatment of cancers via its novel, GM-CSF neutralization and gene-knockout platforms. As a leader in GM-CSF pathway science, we believe that we have the ability to transform CAR-T therapy and a broad range of other T-cell engaging therapies, including both autologous and allogeneic cell transplantation. There is a direct correlation between the efficacy of CAR-T therapy and the incidence of life-threatening toxicities (referred to as the efficacy/toxicity linkage). We believe that our GM-CSF neutralization and gene-editing platform technologies have the potential to reduce the inflammatory cascade associated with serious and potentially life-threatening CAR-T therapy-related side effects while preserving and potentially improving the efficacy of the CAR-T therapy itself, thereby breaking the efficacy/toxicity linkage. Clinical correlative analysis and pre-clinical in vivo evidence points to GM-CSF as the key initiator of the inflammatory cascade resulting in CAR-T therapy’s side-effects. Pre-clinical in vivo data on the neutralization of GM-CSF using antibody or gene KO indicates that it is not required for CAR-T cell activity. Our strategy is to continue to pioneer the use of GM-CSF neutralization and GM-CSF gene knockout technologies to improve efficacy and prevent or significantly reduce the serious side-effects associated with CAR-T therapy.
We believe that our GM-CSF pathway science, assets and expertise create two technology platforms to usher in next-generation CAR-T therapies. Lenzilumab, our proprietary Humaneered® anti-GM-CSF immunotherapy, has the potential to be used in combination with any FDA-approved or development stage CAR-T therapy, as well as in combination with other cell therapies such as HSCT, to make these treatments safer and more effective. In addition, our GM-CSF knockout gene-editing platform has the potential to create next-generation CAR-T therapies that may inherently avoid any efficacy/toxicity linkage, thereby potentially preserving the benefits of the CAR-T therapy while altogether avoiding its serious and potentially life-threatening side-effects.
The company’s immediate focus is combining FDA-approved and development stage CAR-T therapies with lenzilumab, the company’s proprietary Humaneered® anti-human-GM-CSF immunotherapy, which is its lead product candidate. A clinical collaboration with Kite, a Gilead Company, was recently announced to evaluate the use of lenzilumab with Yescarta®, axicabtagene ciloleucel, in a multicenter clinical trial in adults with relapsed or refractory large B-cell lymphoma. The company is also focused on creating next-generation combinatory gene-edited CAR-T therapies using strategies to improve efficacy while employing GM-CSF gene knockout technologies to control toxicity. The company is also developing its own portfolio of proprietary first-in-class EphA3-CAR-T for various solid cancers and EMR1-CAR-T for various eosinophilic disorders. The company is also exploring the effectiveness of its GM-CSF neutralization technologies (either through the use of lenzilumab as a neutralizing antibody or through GM-CSF gene knockout) in combination with other CAR-T, T cell engaging, and immunotherapy treatments to break the efficacy/toxicity linkage including the prevention and/or treatment graft-versus-host disease (GvHD) in patients undergoing allogeneic HSCT. The company has established several partnerships with leading institutions to advance its innovative cell and gene therapy pipeline.
Medium-Term Play - COVID-19 Therapeutic:
The current Humanigen portofolio is primarily Lenzilumab, is a humanized monoclonal antibody that targets colony stimulating factor 2 (CSF2)/granulocyte-macrophage colony stimulating factor (GM-CSF).
Read more about Lenzilumab:
For COVID, the important point is is that it is currently treating the life-threatening chimeric antigen receptor cell (CAR-T) that is associated with cytokine release syndrome, which is an acute systemic inflammatory syndrome characterized by fever and multiple organ dysfunction that is associated with chimeric antigen receptor (CAR)-T cell therapy, therapeutic antibodies, and haploidentical allogeneic transplantation.
CRS is currently induced especially (but not only) by COVID-19, with high mortality. How COVID-19 induces cytokine storm with high mortality - PMC
Humanigen applied for Emergency Use Authorization (EUA) with the FDA to use Lenzilumab as a COVID-19 therapeutic, which was denied on September 9, 2021. In the denial, the FDA cited no safety concerns with Lenzilumab, but cited to the lack of data from the Phase III LIVE-AIR clinical trial and encouraged Humanigen to re-submit with additional data.
In the Phase III LIVE-AIR clinical trial, early intervention with Lenzilumab was demonstrated to prevent the consequences of a full-blown cytokine storm in hospitalised Covid-19 patients. Furthermore, lenzilumab showed improvement in the relative likelihood of survival in hospitalised patients in a Phase III trial. It showed a 54% greater chance of survival without requiring invasive mechanical ventilation was observed in patients receiving Lenzilumab plus other treatments versus those on placebo plus other treatments.
In August 2021, the company reported that the National Institutes of Health (NIH) progressed the ACTIV-5/BET-B study of its Lenzilumab for COVID-19 from a Phase II exploratory trial to a Phase II/III trial. This study is being funded entirely by the NIH.
The company completed its MHRA submission to the UK on September 30, 2021, seeking marketing approval for lenzilumab. Humanigen has said that process could be as long as 60 days but could be shorter.
They are also working to complete their submission for EU authorization. Last week, Humanigen announced that it was submitting additional data to the FDA and is committed to applying for an EUA again before the end of 2021.
Long-Term Play - CAR-T Cancer Therapeutic
CRS is a serious problem that causes high mortality in cancer patients. Cytokine release syndrome occurs after treatment with immunotherapy that activates T cells to fight cancer. These therapies trigger a widespread immune inflammatory response due to the release of cytokines.
Stock History:
The stock first jumped from $9.55 to $13.25 in December 2020 when Humanigen announced its partnership with the Mayo Clinic on the study of using Lenzilumab to treat COVID-19.
The stock jumped again from $13.62 to $21.98 on March 29 when Humanigen announced the positive Phase 3 Results. Study can be found here: https://www.businesswire.com/news/home/20210329005301/en/Humanigen-Reports-Positive-Phase-3-Topline-Results-Demonstrating-That-Lenzilumab™-Improves-Survival-Without-Need-for-Mechanical-Ventilation-in-Hospitalized-Patients-With-COVID-19
The stock tumbled from $15.78 to $6.11 when EUA was denied by the FDA and has remained in that $6.00-$6.50 price range since that time.
Thesis:
Humanigen will jump back to $18.00/share if it receives UK approval. The only reason the stock dropped is because of the EUA denial and the initial (false) reports that there were safety concerns. Humanigen seems even more bullish on UK approval and last week signed a distribution agreement in anticipation of receiving that approval. If the UK approval arrives within 60 days (or around Dec. 1, 2021), Humanigen’s stock would likely see a rise back to the prior average of $18.00/share.
If the UK approves Lenzilumab, Humanigen will be able to use that data plus the data it continues to receive from the NIH study to both supplement its submission to the EU and re-submit its submission to the FDA. If Lenzilumab is approved in EU or US, the stock would be expected to jump to approximately $30-$35. I can provide links to analysts estimates, but it is probably better for you to go search for them and read them yourselves.
Finally, many of the top executives chose to forego some or all of their salaries for 4th quarter 2021 in exchange for stock options. It is clear that they believe in the stock and the ability of the drug to do great things.
Conclusion:
It’s a $389 million marketcap company that would have 1B revenue after UK approval just from the Lenzilumab orders. It certainly has the potential for a buyout as well in the event the other major drug manufacturers want to add a COVID-19 and CAR-T therapeutic to their portfolio. I would caution against buying short-term options because, like any other pharma company, the approval process is out of their control. If you prefer to play options, Feb. 2022 and May. 2022 both are safer plays.
My positions: 8,250 shares; 20 x 12.5 Call 5/20/22
