Cancer treatments are dominating the headlines after at least £10bn was wiped off AstraZeneca (AZN) following its failed MYSTIC lung cancer trial on 27 July.

AstraZeneca could not prove the combination of durvalumab and tremelimumab immunotherapies was more effective at stopping the progression of lung cancer compared to chemotherapy.

Cancer can be treated in various ways, but one of the biggest breakthroughs set to redefine treatment is immunotherapy, also known as immuno-oncology.

This involves using the immune system to target and destroy cancerous cells without invasive and dangerous side-effects from surgery or chemotherapy.

There are a few UK-listed companies benefitting from  these innovative treatments against cancer through immuno-oncology breakthroughs, providing tech to develop treatments or protecting against side effects from chemotherapy.

Companies breaking ground in these areas are Oxford BioMedica (OXB), Abzena (ABZA:AIM) and Clinigen (CLIN:AIM).

BLOCKBUSTER POTENTIAL

It has been a whirlwind year for Oxford University spin-out Oxford BioMedica, which we initially flagged back in March before Novartis submitted its CTL019 treatment for approval.

Oxford BioMedica manufactures lentiviral vectors, in laymans terms tools for gene delivery, for CTL019.

Since March, the biopharmaceutical company’s share price has nearly doubled to 8.6p. This is before the therapy has even been approved by the US Food and Drug Administration (FDA) so we believe the share price has further to run.

Jefferies analyst Peter Welford believes CTL019 has the potential to hit blockbuster status, forecasting at least $1bn in peak worldwide sales.

CTL019 replaces genes in the white blood cells of leukaemia sufferers, which allows them to recognise and attack cancer cells.

N+1 Singer’s Sheena Berry has upgraded earnings before interest, tax, depreciation and amortisation from £1.5m to £2.4m in 2017 on a new supply agreement with Novartis.

The analyst believes Oxford BioMedica could potentially receive over $100m over the next three years.

Earlier this month, the US Food and Drug Administration’s Advisory Committee voted unanimously in support of CTL019. This is good news for Oxford BioMedica as the FDA typically follows recommendations from the panel.

The FDA’s ultimate decision is expected by 29 September 2017.

If the treatment is approved, Rodman & Renshaw analyst Joseph Pantginis forecasts 3% of royalties for the biopharma firm. He estimates $127.3m in revenue for Oxford BioMedica from sales of CTL019 in 2022.

GROUNDBREAKING TECHNOLOGY

Life sciences group Abzena is set for a potential share price rally as it waits for American biopharma firm Gilead’s Phase III trial results for andecaliximab in the third quarter of this year.

Abzena provided the composite human antibody technology for andecaliximab, which was developed by Gilead to treat gastric cancer.

The share price has rallied 29.5% to 49.9p since the start of 2017 as excitement over the looming results from Gilead mounts.

If Gilead is successful in developing the treatment, Abzena would benefit from licence fees, royalties and milestones in the low-to-mid digit range.

While this sounds low, Gilead is anticipated to hit $1.4bn in peak sales for andecaliximab, which could potentially also be used to treat rheumatoid arthritis and cystic fibrosis. Gilead aims to launch the treatment in 2020.

Abzena improves the properties of pharmaceutical products to make them work more effectively through its Inside programme.

In June, Numis analyst Stefan Hamill said the ultimate sales potential from the Abzena Inside programme currently in the clinic is approximately $10bn.

Since then, Abzena has sealed a licence agreement with Telix Pharmaceuticals to develop products for the imaging and treatment of prostate cancer.

The deal has the potential to deliver over $65m in licence fees and milestone payments to Abzena.

In April, the firm raised £25m to upgrade its US biomanufacturing facilities. The funds will allow Abzena to supply more products and enhance its biology and chemistry offerings in the US and UK.

PROTECTION AGAINST CHEMOTHERAPY SIDE EFFECTS

Specialty pharmaceutical company Clinigen is one to watch this year after it was able to lift restrictions for its cardio protective cardioxane in Europe.

In the year to date, Clinigen has rallied 21.9% to 988.4p.

Cardioxane helps protect the heart during chemotherapy, but was seen as dangerous to children. The drug was thought to put children at risk of a major heart attack so sales were restricted to adults in Europe.

Clinigen has worked hard to lift the restriction and prove that cardioxane does not cause heart attacks, which it was able to do through support from over 60 key opinion leaders in cardiology.

While leading French regulatory agency ANSM is happy to lift the restriction, it needs to be rubber stamped by the European Medical Agency so Clinigen can promote the drug to senior physicians.

It would also allow the company to revitalise the product and benefit from an uplift in sales in the medium term.

Broker Stifel analyst Max Herrmann is optimistic about the company’s outlook and anticipates that cardioxane will drive ‘strong growth going forward.’ [LMJ]

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