Agenus (AGEN) stock did not tumble as some headlines insinuated, but was the early victim of exaggeration reaction to news that was expected since long ago. It was not the first time GlaxoSmithKline’ (GSK) MAGE-A3 lung cancer vaccine fails to help lung cancer patients. It happened before and it was predicted to happen again.
Although the MAGE-A3 did not meet the progressive free survival (PFS) or overall survival (OS) endpoints for patients with non-small cell lung cancer, Glaxo still plans to continue to study the vaccine in a smaller subgroup of patients who may respond better to the drug based on their genetic makeup. Glaxo estimates that there is a 10% possibility that MAGE-A3 vaccine could result in a significant benefit for some patients.
The therapeutic vaccine aims at boosting the immune system to recognize and attack cancer cells. It has previously failed to meet studies’ endpoints for melanoma and the expectations for non-small-cell lung cancer have been low per early trial results that demonstrated a lack of a T-cell response to the drug. The vaccine could not direct the immune system into identify and attacking the malignant cells.
In premarket trading, those who usually react to the news, any news, before they analyze it caused a selloff in AGEN resulting in 27% decline in the stock price. The stock then rebounded as those who know AGEN and the transformation of its pipeline, especially, the addition of immune checkpoint inhibitors, took advantage of the dip and bought the stock, which resulted in recuperating 50% of the losses at around 11 AM. The hysterical reaction against Agenus emanated from the fact that GSK uses Agenus adjuvant in its therapeutic cancer vaccine!
We believe the early reaction towards the news against AGEN is exaggerated. GSK has several preventive and therapeutic vaccines that have Agenus’ Stimulon adjuvant. Most these vaccines are doing well in the trials, including the malaria vaccine, which is expected to be approved this year, setting a historical precedent. GSK’s other vaccines that contain Agenus’ adjuvant Stimulon have reached final phase trials and are showing positive results. GSK is comfortable using Stimulon.
Glaxo is also continuing to study the vaccine in a sub-group of melanoma patients who could benefit from the vaccine. Both GSK and AGEN announced that in case the studies on the subgroups are successful, Glaxo would file for marketing approval in both indications for the smaller groups of patients,
Again, we say, the premarket reaction against AGEN is exaggerated.
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