Affimed (AFMD) announced Q2 results today, which showed that the pipeline is progressing as planned. Below is an update for each candidate:
AFM13: On Track For NK Combo Initiation
The lead candidate, AFM13 monotherapy is being tested in a registrational Phase 2 in patients who have refractory T-cell lymphoma. Interim data is expected to be in mid-2021. Although this is the most advanced candidate in the AFMD pipeline, we do not place much value in AFM13 as a monotherapy. Refractory T-cell lymphoma is a competitive field with a relatively small market opportunity. The value of AFM13 monotherapy is in the proof of concept for combination studies.
On the combination front, AFM13 is being mixed with off-the-shelf NK cells from MD Anderson. MD Anderson is running the study and is currently screening patients, preparing them for recruitment. This study has experienced Covid delays due to Texas being hit hard (MD Anderson is located in Houston). Patient recruitment is expected as soon as the Covid conditions in Texas improve. We think launch of AFM13+ NK cell study can act as a Q4 catalyst.
Remember that MD Anderson announced impressive results for their own modified/targeted NK cells (watch here), and licensed the technology to Takeda. Affimed’s own MD Anderson collaboration is working on a similar approach.
AFM24: Checkpoint Combination Studies Being Planned
AFM24 is targeting EGFR-expressing solid tumors through a novel mechanism of action (read details here). This is a huge market with existing EGFR therapies nearing $5B in sales annually. The existing EGFR therapies, however, are burdened with toxicity and mutation resistance.
AFM24 is currently in Phase 1/2a studies. recruiting patients for Cohort 2 (see below). In Cohort 1, no dose limiting toxicity was observed. Cohort 1 was a low level of drug that was chosen to maximize safety and is likely well below levels where efficacy can be expected.
AFM24 planned dosing:
Cohort 1: 14mg
Cohort 2: 40mg
Cohort 3/4: Up to 120mg
Cohort 5: 1000mg
Affimed is planning to initiate a combination AFM24+ checkpoint inhibitor study in parallel with the last cohorts of the monotherapy study above. We think this lands sometime in late 2020.
RO7297089 (partnered with Roche/Genentech): Initiated/Dosed
Roche dosed the first Multiple Myeloma patient in the BCMA/CD16A innate cell engager collaboration they have with Affimed. This triggered a milestone payment in July, which is expected to be recognized in AFMD Q3 results. The Phase 1 study is actively recruiting patients.
Unlike the other bispecific candidates that are in clinical development for multiple myeloma, which engage T-Cells, RO7297089 binds to the CD16a receptor on the NK & macrophages immune cells and BCMA on multiple myeloma cells (read more here).
This is an important distinction because NK cells / macrophages have a more favorable safety profile than T-Cells, which are burdened with cytokine release syndrome (read early data here).
Financial Position
Affimed ended Q2 with $110M in cash, enough of a runway into 1H 2022. The company has an ongoing ATM with Jeffries, but to our surprise, have only tapped about half of it. As of June 30, AFMD has issued 8.1M shares under the ATM, generating proceeds of $23.1M.
It is interesting to note that since the ATM was announced in mid-May, there have been more than 100M shares of AFMD traded. This includes multiple large block trades. Yet only 8.1M shares have been issued under the ATM. There seems to be increasing interest in large open market purchases of AFMD. That is a bullish sign.
Bottom Line: AFMD is trading at $3.50/share and has approx. $1.30/share in cash. The EV of the company is $170M. With data expected in 2021 for AFM13/AFM24 and Roche collaboration, we think AFMD risk/reward is very compelling. Patience can payoff here.
PropThink contributors are LONG AFMD
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