Genelux: Recent IPO With Phase 3 Stage Oncolytic Virus Cancer Therapy

Genelux (NASDAQ:GNLX) is a recently IPO-ed phase 3 stage cancer therapeutics company. Its business is designing “oncolytic viral immunotherapies that are designed to generate a personalized multi-prong attack to overwhelm a tumor’s sophisticated defense mechanisms.” Lead candidate olvi-vec (olvimulogene nanivacirepvec), the company claims, is a “proprietary, modified strain of the vaccinia virus (VACV), a stable DNA virus with a large engineering capacity having the potential to:

• Directly kill cancer cells

• Stimulate a tumor-specific immune response

• Ability to transform immunologically “cold” tumors into “hot” tumors allowing for responsiveness for immunotherapy.”

The molecule is being run in a phase 3 trial in platinum-resistant/refractory ovarian cancer. The first patient has been enrolled in September 2022. There will be approximately 188 patients. This study will produce topline data in the 3rd quarter of 2024.

In a phase 1b/2 trial, the molecule demonstrated proof of concept. As both monotherapy and combination therapy, the molecule demonstrated anti-tumor activity in heavily-pretreated patients with no further treatment options and documented disease progression. In the phase 1 part of the trial, with olvi-vec as monotherapy, clinical benefit rate or CBR was 73%, with twice the PFS as seen in chemotherapy. The drug was well-tolerated, with no dose-limiting toxicities and no maximum tolerated dose, as well as no grade 4 or greater adverse events.

In the phase 2 part of the trial, olvi-vec was followed by chemotherapy. Despite the disease being platinum-resistant, the idea was that the administration of olvi-vec primed the tumor for further chemotherapy. The trial saw a 54% RECIST response in the 27 patients, compared to approximately <15-20% historical response to chemotherapy. The trial also saw 11.0 months of median progression-free survival (PFS') vs. ~5 mo. in the historical population. This was the data in all PRROC (platinum-resistant/refractory ovarian cancer) patients. In the 13 refractory patients, there was also a 54% RECIST response; however, the historical response rate was less than 10%. In the patients in the trial, there was only a 7% response rate in their most recent platinum line. There were 11.4 months of median PFS versus around 3 months of historical PFS.

These numbers look good, but we need to understand that these are merely indicative. The data clearly shows that there is drug activity. However, absent a randomized trial with an active control, or at least a placebo arm, there is no way to figure out whether these data are statistically significant, as opposed to mere chance. Hence the need for the phase 3 trial.

Genelux has been around the block; the company was established in 2001 and has been working on developing an oncolytic virus therapy targeting cancer for two decades. The company began work at a time when Amgen (AMGN) was still developing T-VEC, the first oncolytic virus approved in the US, for melanoma. The field generated a lot of interest in the early years; however, after the enthusiasm surrounding that early approval, enthusiasm has lagged, because the space has been flooded with more sophisticated therapies. In theory, the idea is simple. For over a century, it has been known that viruses can kill cancer. Initially, wild-type viruses were used, and later, mutated viruses were also used in studies. There are two basic ways by which a virus can kill a tumor cell - one, by directly killing the cell, and two, by triggering an immune response from the body. A number of types of viruses have been studied. T-VEC is a modified herpes simplex virus, while olvi-vec is a modified vaccinia virus, the same type of virus used to eradicate smallpox.

The oncolytic virus field is not a new field. It has been around for two decades, with only one approved product. Olvi-vec has done a phase 2 trial with some measure of success. However, there already existed some proof of concept for years. What is necessary is to show tumor regression in a phase 3 confirmatory trial. Topline data is just over a year away, and that is the crucial catalyst for GNLX stock.

Financials

GNLX has had a very nice IPO. Launched at around $6, the stock now trades at $30. Market cap is $598mn. The company had just a million plus dollars in cash and another $24mn in convertible notes as of September, before the IPO. Two years ago, in 2021, the company spent some $6mn in R&D and $6.8mn in G&A. However, these figures are now obsolete. As they came to the market, and as they launched a phase 3 trial, both their cash position and their expenses will significantly change. Hence no conclusions about their cash runway can be drawn from these past data.

Bottom line

GNLX has a few good things going for it. First, it was able to launch a strong IPO after smartly postponing it during the biotech winter of 2022. Second, they have solid proof of concept data from a therapy utilizing a proven technology. Third, they have solid data in an area of unmet need with a $250mn potential revenue figure at peak in one indication, and $1bn in label expansion potential. Considering all things, GNLX looks good in theory. However, I never invest in recent IPOs because they are often volatile as to price. So I will simply wait and watch this one.

About the TPT service

Thanks for reading. At the Total Pharma Tracker, we offer the following:-

Our Android app and website features a set of tools for DIY investors, including a work-in-progress software where you can enter any ticker and get extensive curated research material. 

For investors requiring hands-on support, our in-house experts go through our tools and find the best investible stocks, complete with buy/sell strategies and alerts.

Sign up now for our free trial, request access to our tools, and find out, at no cost to you, what we can do for you.