When we last covered TapImmune Inc (NASDAQ:TPIV) back in February, the company was trading for around $4 flat. We highlighted it as one to keep an eye on throughout 2017 based on the fact that it had finally got its ducks lined up and there was some degree of potential to get various catalysts in the hands of markets and to start moving in line with fundamental development.
Fast forward to today and we’ve seen practically nothing from the company that could get markets excited. TapImmune goes for $3.05 and commands a market capitalization of just $32 million. For a company that counts AstraZeneca plc (ADR) (NYSE:AZN) among its commercial collaborators and that has two (soon to be three) mid stage oncology assets in development alongside entities like Memorial Sloan, Mayo Clinic and the Department of Defense, this seems like a crazy undervaluation as compared to peers in a similar (or worse) situation.
Our bull thesis last time rested on this above-described disparity in true and actual valuation.
Now, it seems as though the company has just been sitting on its hands for the last six months; that would explain why we’ve not seen any real updates or press releases as to how things are maturing with regards to the development programs currently underway.
That’s not necessarily true, however.
There are three trials that are really going to drive value for this company over the coming 24 months. These are a phase II investigating TPIV200 in combination with AstraZeneca’s Durvalumab in patients with ovarian cancer; another phase II investigating the same asset in the same indication but in combination with an adjuvant called Leukine and as compared to Leukine alone; and another that’s basically the same as the second (phase II, drug with adjuvant) but in a breast cancer indication.
All are enrolling as we speak, with the first having kicked off in May last year, the second kicking off in January this year and the third kicking off in April.
The problem is, as we see it, that these trials are pretty slow burners. Markets don’t like slow burners and, in the absence of any report-worthy numbers (these are survival studies, meaning it’s tough to gauge efficacy before a certain threshold is reached), the company hasn’t been able to keep markets interested in what’s going on.
That’s to this point, however.
As per this week, a new CEO is in place, Peter L. Hoang, and we think this is a strategic move ahead of the company trying to get some traction in the public markets.
If the trials are slow burners, how is this possible?
Well, the adjuvant/vaccine trial in ovarian cancer isn’t going to complete before 2020 and it’s a blinded study, so we can write that one off as likely having no reportable news for a while.
The other two, however, could be interesting.
The TPIV200/Durvalumab trial is set to complete in May next year. That’s around six months ago, sure, but it’s an open label study and there’s a one-year RECIST marker, meaning many of the 40 patients enrolled will likely already have reached measurement threshold. This means we’ve got the potential for some interim numbers before the top line hits press.
The vaccine/adjuvant study in breast cancer isn’t going to complete before December 2020. However, it’s also open-label and TapImmune has set December 2017 as a primary completion date, meaning there’s a good chance we’ll get some early indication of efficacy in and around this point (so, in around twelve weeks’ time). At this point, the first patients will have been dosed monthly for six months and will be at the first booster dose point – allowing for a key progression measurement. If only a small number have progressed (so, their cancer has gotten worse) then it will imply efficacy and this stock is really going to run.
These trials are funded in part through the collaborations but there’s always a dilution risk at this end of the market so keep that in mind, but it’s about time we started to see some speculative loading and – if the numbers are favorable – it’s only going to be a short time before this stock takes off.
Here are the three protocols:
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Disclosure: We have no position in TPIV and have not been compensated for this article.