MEDIVIR (MVIR Nasdaq Stockholm) - a home run, both in the short and the long term

2021-10-19 09:17

1. With continued good results for Miv-818 in liver cancer Medivir is sitting on a real gold mine! 2. Present license deals may generate 500 msek in 2022/23 and 900 msek in 2024/25 - tax loss carry forwards are close to 1,200 msek 3. Two phase 2 ready assets are ready for licensing 4. The market has an Enterprise Value of 300 msek despite the three points above 5. The market is not connecting the dots..........yet

MIV-818 - A possible home run in Liver cancer

HCC (HeptoCellular Carcinoma) is the main liver cancer. It is a very aggressive disease. If diagnosed in an advanced/metastatic setting the survival outcome is poor with standard treatments. HCC is one of the leading causes of deaths worldwide. In 2020 905.000 people (mainly in Asia) where diagnosed with HCC. It is a large medical problem in Asia. In Europe and the US it is increasing but stil classified as an orphan disease.

Immunotherapy, mainly thru PD/-L1 inhibitors, has in recent years been introduced and improved the median survival length. They have been tested as monotherapy, and recently in combination with

1) the old and new anti-angiogenics/tyrosine kinase inhibitors (First Line for may years) or

2) another immunotherapy (CTLA-4)

Most clinical trails to report the coming years are of this nature (mono or the two combos above). It is honestly hard to forsee any larger news (i.e more than marginal) coming from these trails apart from two substances that have the potential to change the playing field radically if they are successful.

These are:

Chinese Shenogen with Icaritin - based on a natural herb it is in phase 3. Reporting is expected December 22. Icartin has also been synthezised to SNG-1153 which is in phase 1 in China and IND approved in the US. The Icartin phase 2 trail showed only marginally adverse events and a marginal tumor response (RESIST) but it translated to a clinical benefit for advanced HCC that was related to HBV (Hep B). This specific benefit could not be explained. The phase 3 reporting in Dec 22 will be interesting but may be as inconclusive as phase 2 was.

Swedish Medivir with the oral prodrug Miv-818 Start of phase 1b/2 in q4-2021 in combo with Keytruda respectively Lenvima. Phase 1b reporting is estimated in October 2022. The single 1a/1b trails of Miv-818 showed that the drug metabolise as intended in the liver and the cancer cells have DNA-breaks & damage while other healthy cells in the liver have not been affected. In phase 1a most patients had advanced metastatic liver and five out of nine patient were independently deemed to have stable disease after treatment. In the 1b trail a majority of the nine patients had HCC and most of these hade stable disease of different periods up to eight months. Corresponding DNA brakes&damage were noted. In both these trails, Miv-818 had an acceptable safety and tolerability profile, with haematological suppression being the most common AE.

The playing field in HCC is presently (Oct 2021) somewhat complex. For years, either of the two TKI inhibitors, Bayer’s Nexavar (sorafenib) and Eisai's Lenvima (lenvatinib) was the First Line therapy in HCC with overall survival (OS) of around meager 12-13 months.

Roche, with the combo of Tecentriq (Atezolizumab - a checkpoint inhibitor) and Avastin (bevacizumab - an antiangiogenic) successfully managed in its Imbrave50 study to show better results and thus replacing Nexavar and Lenvima as First Line therapy. Median overall survival respectively progression free survival was 19 months and 6,8 months. ORR was around 30% with adverse events such as hypertension, fatigue and proteinuria.

With a new First Line therapy there are no studies of Nexavar or Lenvima as Second Line therapy. Real clinical experience will tell how they will work as Second Line after the new Roche cocktail.

The change in first line therapy also means that a number of pending combo studies with checkpoint inhibitors (CPI) & tyrosine kinase inhibitors (TKI)/antiangiogenics are measuring their results vs a Standard of Care (First Line) which no longer is First Line which can complicate the medication sequence going forward.

Recent developments

In 2018 both checkpoint inhibitors Opdivo (BMS) and Keytruda (Merck) obtained Accelerated Approval as monotherapy in HCC based on their phase 2 results. In an evaluation during spring of 2021 FDA decided, based on later studies, that Opdivo would loose its approval while Keytruda could keep it subject to good results in two studies that now (Oct-21) have shown results. One study was a failure but the other was a success which makes it probable that Keytruda will keep its approval as monotherapy. Detailed data regarding the last study will be presented at a medical conference.

EliLilly, Exelexis and Jiangsu all have phase 3 studies that are reporting finally in December 2021 but already now based on preliminary reporting these will either be failures or report non-exciting results.

The AstraZeneca Himalaya study reported now in October 2021. This is a combo study of two CPI's, Imfinzi (PD/-L1) and Tremelilumab (CTLA-4). Preliminary results showed that the combo was better than Nexavar - i.e. it could reach an approval. Awaiting the full data package it is, however, doubtful that it will beat the Roche combo.

Future developments (coming 18 months)

Most of the other ongoing phase 3 trails are sort of, from a mechanistic point of view, so to say, "me too".

Mono (Keytruda probably still approved)

CH Beigene                   Tizlelilumab     May 22

CH Shenogen(above) Icaritin              Dec 22

CH Junshi                     Torinpalimab   April 23

Combo CPIs (AstraZeneca probably approved in 2022)

US Bristol Meyer Sq    Opdivo&Yervoy Mar 23

Combo CPI & TKI/anti-angionesis (Roche already approved as First Line Therapy)

CH      Jiangsu          Camrelizumab & Apatinib        Dec 21

US/JP Merck&Eisai Keytruda & Lenvima                  May 22

CH       Junshi           Toripalimab & Avastin biosimilar     Aug 22

UK/S    AstraZeneca TACE Imfinzi & Avastin                       Sept 22   

CH        Innovent         Sintilimab & Avastin biosimilar      Dec22 (Appr in China)

Apart from these studies Roche will secure its approved combo thru a number of trails over the next years. As said previously, the above studies are very much "me-too" and the chance/risk they will really rock the boat is not very big. The above AstraZeneca study with TACE is however earlier in the HCC disease development/management - with good results it could change the HCC treatment landscape favourably. Merck&Eisai and BMS&Ono are also conducting trails in the earlier stage (in connection to TACE) which will report in 2025 resp 2023.

There many unresolved questions in terms of treatment scenarios after the First Line approval of the Roche combo. Futher large trails will be needed to define a correct treatment sequence of HCC. The obvious alternative to that could be a successful 1b/2a combo trail of Medivir's Miv-818 in advanced HCC with Keytruda resp Lenvima. Such a success could possibly, as a result of the DNA damage it causes, also implicate less need of TACE procedures in intermediate liver cancer and thus become a holy grail to the liver cancer field.

Interestingly Merck&Eisai are reporting their phase 3 combo trail of Keytruda and Lenvima already in May 2022.

To summarize Miv-818

[ ] Assume the Miv-818 combo will start in q4-2021 and report 1b in q3- 2022.

[ ] During that time the landscape will not change very much (apart from Keytruda mono remains and AZ combo is approved)

[ ] In May-22 there is a readout of the Merck & Eisai combo - a good or reasonable result will be a good starting point for Medivir coming readouts

[ ] Somewhere along the line people covering HCC will realize that Miv-818 could have the potential to change the entire HCC landscape and obtaining "Break-thru-therapy designation" is likely

[ ] Somewhere in 2023 Medivir will be able to report the phase 2 results. If these are as good as seen in phase 1 trails or better the boat will definitely rock. Medivir has the opportunity to get a "conditional accelerated approval' and be on the market already in second half of 2024 or 2025.

[ ] Miv-818 has Orphan Drug Designation in the US and in EU

[ ] Many Asian and Global companies will see the attraction in Miv-818, especially e.g. Eisai and Merck.

[ ] Medivir expects the HCC market to grow drastically the coming years. Combinations and earlier treatments are the main drivers to expand the market 5- fold to the end of the decade. 

[ ] Medivir appears well positioned to take part of this market and the high market growth.

To summarize Medivir:

[ ] Miv-818 as above - highly interesting case

[ ] Remitionstat (BCC/CTCL) ready for a licensing deal as we speak

[ ] MIV-711 (Oesteoartritis - OA) - joker that could find licensee as the OA pipeline shrinks with lack of any Diseasemodifying drug. Opportunity can increase during q4-21 and onwards. Medical need is huge.

[ ] Licensee of Birinapant, IMG Biosience (US), to take it into clinic within months

[ ] Licensee of USP-1 , Tango Therapeutics (US) to take it into clinic within 6 months

[ ] Medivir had about 225 msek in cash at end September 2021. At end of year 2021 it is probably 210-220 msek plus any upfront from a Remitinostat deal.

[ ] Present already agreed licenses can deliver milestone payments over about 5 years of roughly 300 musd (2,5 SEK billion or 44 SEK per share) to Medivir (after deduction of Tetralogic share estimated at 25-30% net). Already 2022/23 an amount of roughly 500 MSEK can be expected in milestone payments to Medivir. If licensees like IMG/Tango etc are successful another roughly 900 msek can be expected 2024/25. Sales will render high royalties.

[ ] Medivir has tax loss carry forwards of close to 1200 msek

[ ] US/European analysts appear to be more realistic in their valuation thinking as apposed to the Swedish equity market which do not seem to see the forest cause of all the trees. Analyst valuation are Wainwright 30 sek, Carnegie 22 sek, Kempen 19 sek and Redeye 6-15-48 sek while market price hoovers just below 10 kr. It is not entirely clear how much these analyst have considered the Miv-818 possiblities that have been dwelled upon above

[ ] A considerable valuation change appears close despite that a new CEO has not been hired yet. The Board does know what type of person they want for the long run & present management does an excelllent job in the mean time. The Board includes two former CEOs of Medivir so the issue appears not to be especially urgent.