Health
Aptevo Therapeutics (APVO): Co-Developing New Immuno-Oncology Drug with Alligator Bioscience
By Edward Kim
July 21, 2017
•2 min read
We highlighted Aptevo Therapeutics (Nasdaq: APVO) in this space two months ago as a company we believed to be underappreciated by the market for its commercial products and clinical pipeline. The stock, among Nasdaq’s top small cap gainers today on the news of a co-development agreement with Alligator Bioscience (Stockholm: ATORX), is still trading around the $2 level – or $40 million market cap territory – and continues to appear to be an undervalued entity.
Alligator is developing antibody-based treatments for tumor-directed immunotherapy. The announced partnership with Aptevo will advance development of a novel bispecific (able to bind to two different types of antigens) immuno-oncology antibody that targets a pathway implicated in multiple solid tumor indications. The candidate is based on Alligator’s first generation bispecific antibody and was developed using Aptevo’s bispecific technology platform, including proprietary binding elements generated by Alligator’s antibody library.
The new candidate, ALG.APV-527, features a novel mechanism of action targeting 4-1BB, a T cell receptor known to play an important role in modulating and augmenting the immune response to cancer by promoting the activation, expansion and enhanced effector function of tumor-specific T cells. If successfully developed, this new bispecific antibody candidate could have utility in the potential treatment of a broad spectrum of cancers including breast, cervical, non-small-cell-lung, prostate, renal, gastric, colorectal and bladder cancers. While this tumor antigen is widely expressed in multiple types of solid tumors, it shows limited expression in normal tissues, suggesting the potential for tumor-directed immunotherapy with improved efficacy and fewer side effects.
Aptevo’s ADAPTIR platform has been shown to possess superior properties in pre-clinical studies over other immunotherapeutic and bispecific T-cell technologies, including:
- High potency – inducing target-dependent cytotoxicity at low concentrations
- Extended serum half-life that enables less frequent administration
- Reliable antibody-like manufacturing processes
Source: Aptevo Therapeutics Investor Presentation, June 2017
We remind readers that Aptevo has four commercial hematology and infectious disease products that have generated $36 million in revenue in the 12 months ending March 2017 and $61 million in cash on the balance sheet as of March 2017, which will provide sufficient runway to get the company into 2018. The stock’s current valuation gives investors essentially a free call option on the clinical portfolio, with the proviso that additional capital will have to be raised by next year. The stock is squarely on our risk-reward radar, and we’ll be looking for continued developmental progress from the company.
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