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Business Update
Encouraging CD8+ T Cell and NK Cell Responses in ABILITY Trial
On June 22, 2022, Medicenna Therapeutics Corp. (NASDAQ:MDNA) provided an update on the Phase 1/2 ABILITY Study (A Beta-only IL-2 ImmunoTherapY Study) of MDNA11 in patients with advanced solid tumors (NCT05086692). Thus far, the company has completed dosing in the first three dosing cohorts. Cohorts One and Two received 10 μg/kg MDNA11 while Cohort Three received 30 μg/kg MDNA11. While it is too early to determine the potential efficacy of MDNA11, the company did note that tumor control was achieved in three out of eight patients, which included some patients seeing tumor shrinkage in target lesions. Importantly, MDNA11 has exhibited an acceptable safety profile and there have been no dose-limiting toxicities (DLTs) or signs of immunogenicity.
One of the things noted during the first few dosing cohorts is the development of fever following the initial dose of MDNA11. Thus, Medicenna decided to implement a "step-up" dosing strategy, which involves first treating patients with two priming doses of MDNA11 before increasing to the higher fixed dose. For example, in Cohort Four, patients will receive two doses of 30 μg/kg MDNA11 with all subsequent doses at 60 μg/kg. While this strategy is likely to result in improved patient outcomes, the company will now be monitoring patients for DLTs for eight weeks (instead of the current four weeks). Thus, we anticipate data from Cohort 4 will be available in the third quarter of calendar 2022 followed by a full set of efficacy data for all dosing cohorts in the fourth quarter of 2022.
In May 2022, Medicenna announced new clinical data from the ABILITY trial that included pharmacodynamic data related to T cell and natural killer (NK) cell activation. Key findings reported at the time from the first three dosing cohorts included:
• MDNA11 treatment at 30 μg/kg resulted in a 17-fold and 10-fold increase over baseline in the expression of Ki67 in CD8+ T cells and NK cells, respectively.
• Expansion of CD8+ T cells and NK cells was significantly greater at the 30 μg/kg dose compared to the 10 μg/kg dose, with levels of CD8+ T cells and NK cells increasing 3- and 6-fold over baseline, respectively.
• MDNA11 treatment at 30 μg/kg increased CD8+ T cells and NK cells preferentially over pro-tumor T regulatory (Treg) cells, with the mean peak CD8+ T cell/Treg ratio increasing by 2.6-fold over baseline and the mean peak NK/Treg ratio increasing by 4.4-fold over baseline.
• There was no significant increase in eosinophil count when compared to baseline following MDNA11 treatment. This is important as extremely high eosinophil count is associated with severe toxicity and is a known side effect of high-dose recombinant IL-2 treatment.
• MDNA11 treatment led to a dose-dependent 3-fold increase in granulysin expressing immune cells. Granulysin is a potent effector molecule that induces cytotoxic effects against tumor cells (Kishi et al., 2002).
The clinical and pharmacodynamic results seen thus far for the ABILITY trial are very encouraging and we look forward to continued updates as the study progresses. At this point, we feel the most important data is the lack of any dose-limiting toxicities, something that has plagued other IL-2 treatments. While some patients did experience fever following initial dosing of MDNA11, we believe the company's "step-up" dosing strategy will help to alleviate the side effect burden for patients and lead to more successful outcomes.
Financial Update
On June 22, 2022, Medicenna announced financial results for fiscal year 2022, which ended March 31, 2022. As expected, the company did not report any revenues for fiscal year 2022. Net loss was CAD$22.6 million, or $0.42 per share, compared to a net loss of CAD$17.3 million, or $0.35 per share, for the year ending March 31, 2021. R&D expenses for fiscal year 2022 were approximately CAD$14.7 million, compared to approximately CAD$10.9 million for fiscal year 2021. The increase was primarily due to costs associated with the development of MDNA11, which included preclinical studies, manufacturing of GMP material, and regulatory costs associated with the initiation of the ABILITY trial. G&A expenses in fiscal year 2022 were CAD$7.8 million, compared to CAD$6.5 million for fiscal year 2021. The increase was primarily due to a full year of costs associated with the Nasdaq listing and corresponding D&O insurance compared to only nine months for the prior year period.
As of March 31, 2022, Medicenna had approximately CAD$20.5 million in cash and cash equivalents. We estimate that the company is funded into late in the second quarter of calendar year 2023. As of March 31, 2022, Medicenna had approximately 55.6 million shares of common stock outstanding and, when factoring in warrants and stock options, a fully diluted share count of 63.1 million.
Conclusion
We are very encouraged by the early results from the ABILITY trial with both the pharmacodynamic and clinical data showing that, while early, MDNA11 appears to be having a positive treatment effect while thus far not displaying any dose limiting toxicities or immunogenicity. The fact that tumor control was seen in three out of eight patients is a great sign, particularly since it was seen at low doses. We look forward to additional updates from the ABILITY trial later in 2022.
We have made one change to our model of decreasing the probability of success for MDNA55 since a partnership seems to be taking longer than originally anticipated, and this has decreased our valuation to $10. However, we remain very enthusiastic about Medicenna's future and the potential for the Superkine platform and view the current downtrend in the stock caused by the overall negative sentiment in the biotech sector as a nice buying opportunity for long-term investors.
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