Dr Boreham’s Crucible: Chimeric Therapeutics

Small Caps | May 26 2023

Tim Boreham reports cancer treatment biotech Chimera has struggled, but may yet have a sting in its tail

By Tim Boreham

ASX code: ((CHM))

Market cap: $17m

Share price: 4c

Shares on issue: 425,278,237*

Chief executive officer: Jennifer Chow

Board: Mr Hopper (executive chair), Ms Chow, Leslie Chong, Dr Lesley Russell, Cindy Elkins, Dr George Matcham

Financials (March quarter 2023): revenue nil, loss of -$687,000, cash of $2.82m

Identifiable major holders*: Paul Hopper 21%, Dr Christine Brown 2.75%, Dr Michael Barish 2.7%

* Ahead of capital raising, which if fully subscribed would add an extra 153,913,040 shares

The imperative for cash-strapped ASX biotechnology companies to get money through the door has been highlighted by oncolytic drug developer Chimeric’s quest to raise up to $6.25m, by way of a placement and a follow-on share purchase plan (SPP).

Chimeric listed in January 2021 after raising $35m at 20c to fund its CLTX Car-T immune-oncology programs, acquired from the City of Hope Hospital in Los Angeles.

In those buoyant times investors had oversubscribed for $60m in the initial public offer (IPO), which was put together by legendary biotech entrepreneur Paul Hopper.

Reality has since bitten with the venom of a deadly scorpion.

As the company announced on Monday, May 15, share plan subscribers are invited to subscribe at 4c a share, a -13% discount on the undisturbed closing price on Friday May 12.

The placement is subscribed by board and management, which Mr Hopper describes as a sign of confidence in the potential of the company’s programs.

Meanwhile, other ASX biotechs raising equity include Dimerix, 4D Medical, while Mesoblast has just done so.

Kiss of the scorpion

CLTX refers to chlorotoxin, while Car-T is short for chimeric antigen receptor T-Cell.

Initially, Chimeric’s main program involved a treatment for the difficult-to-treat glioblastoma, a form of brain cancer.

In an exotic vein, the active ingredient derives from the venom (peptide) of the deathstalker scorpion - chlorotoxins that bind to unique targets in the body.

This scorpion juice is worth something like $9,000 a gram, but fortunately for researchers the active ingredient is derived synthetically and they don’t have to chase the arachnids across the Sahara Desert.

The toxin is familiar to the oncolytic community, because for years it has been used as an imaging agent to detect cancers.

“Logically if you have something that will tell you where cancer cells are, it will attach to these cells,” says Chimeric chief executive Jennifer Chow.

Search and destroy

Car-T therapies work by ‘supercharging’ the body’s T-cells to fight cancers.

The genetically-engineered cells are grown by the millions in a laboratory and then re-injected, resulting in the patient getting a turbo-charged version of their own T-cells.

Car-T treatments are known to be effective with blood-based cancers such as leukaemia, with six drugs approved in the US.

Formally known as a 36 amino acid peptide, the scorpion toxin recognizes a cancer marker called membrane-bound matrix metallo-protease-2 (MMP2).

The healthy cells are unharmed.

Ms Chow says Chimeric has focused on “first-in-class assets with novel design”.

Chimeric’s work has also expanded into so-called ‘natural killer’ cells, based on assets derived from Case Western Reserve University in Ohio (a state hitherto better known for its Rock ‘n Roll Hall of Fame).

It’s all about the people

A former executive at Car-T specialist Kite Therapeutics, the Toronto-born Ms Chow was Chimeric’s chief operating officer before being anointed in the top job in August 2021.

She had also held roles at Roche, Nycomed/Takeda and Schering Canada.

Ms Chow says the Chimeric team has 75 years’ collective experience in the space, having been involved elsewhere in taking four of six of the approved Car-T drugs to market.

Chimeric’s foundation intellectual property was devised by City of Hope researchers Prof Christine Brown and Dr Michael Barish. The former chairs Chimeric’s scientific advisory board.

Mr Hopper has founded - or been involved in - no fewer than 14 drug companies, including fellow ASX-listed immuno-oncology play Imugene. We only mention this because Imugene chief Leslie Chong moonlights as a Chimeric director.

The board also includes Cindy Elkins, an erstwhile Juno Pharmaceuticals heavyweight.

Don’t mention the C word

While the C (cure) word is still only mentioned in hushed tones in the oncolytic community, Ms Chow cites the example of a 33-year-old US woman undertaking Car-T-cell therapy for aggressive acute myeloid leukaemia (AML) at an Ohio research centre.

Within days, the patient’s condition had stabilized and within 33 days the cancer had disappeared. More than two years later, she was still cancer-free.

“I have worked in cancer for my whole career and have never seen outcomes like this before,” Ms Chow says.

She says cancer treatment had developed incrementally over decades, with the advent of chemotherapy and targeted and immune therapies.

“It wasn’t until the introduction of Car-T therapies that we measured the improvement in term of years, the outcomes have been really dramatic.”

Unrelated to Chimeric, an early-stage Italian Car-T clinical paediatric trial has shown encouraging results in the solid tumor neuroblastoma, a nerve tissue cancer that affects the adrenal glands.

Carried out at Rome’s Bambino Gesù Children’s Hospital, the study showed that nine of the 27 enrolled children exhibited no sign of cancer after six weeks. It wasn’t entirely a feel-good story in that two later relapsed and died, bearing in mind that all the kids were in a bad way.

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