Elevation Oncology, Inc. (NASDAQ:ELEV) is gearing up to report data from its phase 1 study to treat patients with advanced solid tumors, using its drug EO-3021, in mid-Q3 of 2024. This will be a major inflection point for investors to keep an eye on because it will be possible that it could establish proof-of-concept in being able to treat these patients. Specifically, it is targeting advanced solid tumor types such as: Gastric, gastroesophageal junction, pancreatic or esophageal cancers.
This study is being done in the U.S. and Japan only because Elevation obtained worldwide rights of EO-3021 outside of China. If the data to be released in the coming quarter is highly positive, then it is expected that the next set of results could be released by the 1st half of 2025.
This will be a highly risky catalyst to keep an eye on, but there is one critical point to consider, which is that this is only going to be monotherapy data of this drug. There is a plan for this biotech to advance the use of EO-3021 together with another cancer drug for the treatment of patients with these advanced types of cancers. Specifically, in the 1st half of 2024, it is going to reveal its plans for initiating a combination study. Data has already been released from CSPC Pharmaceutical Group Limited, where EO-3021 had been licensed from. Thus, there is some preliminary data to reveal below.
Lastly, this biotech is also advancing another drug, known as HE3-ADC. This is an antibody drug conjugate [ADC] being developed for the treatment of patients with HE3-expressing solid tumors.
EO-321 For The Treatment Of Patients With Advanced Solid Tumors
The main program to be concerned about with this biotech would be the advancement of EO-321, which is being advanced in a phase 1 study for the treatment of patients with advanced solid tumors. Again, the solid tumors to be targeted are to be specific ones, which I will be going over below. Before going over the ongoing phase 1 study, plus any catalysts to come out of this program, it is first important to go over what solid tumors are and what the possible market opportunity could be. Solid tumors, as the name suggests, are malignant cancer cells that form a solid mass.
One thing to note is that there are times whereby a solid mass may not be cancerous at all, and in this situation the tumor itself is classified as being benign. It does not have cysts or liquid areas at all. The next thing to note is that Elevation Oncology is going after specific tumor types and the market opportunity for each of them is as follows:
- Global esophageal cancer market expected to reach $2.19 billion by 2029
- Global Gastric [Stomach] cancer market expected to reach $11.2 billion by 2030
- Global pancreatic cancer market expected to reach $6.85 billion by 2029
- Global gastroesophageal junction carcinoma market expected to reach $2.6 billion by 2028.
The thing is that the number of patients to be targeted is largely going to depend upon a specific population. How so? Well, the goal for this company is to use EO-3021 to focus on Claudin 18.2 expressing solid tumors. Thus, it is likely a fact that this biotech will focus its use of EO-3021 as a monotherapy for only targeting a niche of the markets I highlighted above.
For example, there was a study where 430 patients with solid tumors were recruited and out of those 4.1% were identified as having Claudin 18.2 expression. Another item to note is that 14.1% of 85 patients with Gastric Cancer had this specific expression. The thing is that there is an opportunity for it to do well here because, as noted by the company, there are no drugs approved to treat Claudin 18.2 expressing solid tumors. Thus, should EO-3021 ultimately be approved, then it would not have much competition, if at all.
Regarding the phase 1 program, there are several ongoing phase 1 studies. That’s because Elevation Oncology was able to initiate such an early-stage phase 1 study in the United States to advance the use of EO-3021 for the treatment of patients expressing Claudin 18.2 mutation expression.
The thing to note is that this particular U.S. study is expected to recruit up to a total of 120 patients who are going to receive various intravenous [IV] doses of drug over an extended period. I believe it is important to lay out expectations here on what is being sought out for regarding this particular early-stage study. This trial is split into two different parts, and they are as follows:
- Part A is to test various doses of EO-3021 to determine maximum tolerated dose [MTD]
- Part B is to test various doses of EO-3021 to find out in the end what the recommended phase 2 dose [RP2D] will be.
Now, why did I mention this phase 1 study as being a United States one? That’s because there is an ongoing phase 1 study program in China, using EO-3021 for the treatment of patients with Claudin 18.2 expressing tumors. This mention of a phase 1 study is important, and it is because the Chinese company CSPC is testing the use of this drug in China to treat this patient population. Speaking of which, the only reason that Elevation Oncology has its hands on EO-3021 is because it licensed it from CSPC back in July 2022. That is, Elevation holds rights to develop and commercialize this drug in any territory outside of China.
I can take it even one step further. CSPC has already been able to present positive results from its ongoing phase 1 study in this region. Such data were presented at the American Society of Clinical Oncology [ASCO] 2023 Annual Meeting. It was shown that with a cutoff date of November 5, 2022, a total of 33 patients with resistant/refractory Claudin 18.2 expressing solid tumors had been treated. About 21 of these patients were evaluable for initial efficacy at that time. The overall objective response rate [ORR] was 38.1%. This percentage was broken down into the following out of these 21 patients:
- 8 patients with a partial response [PR]
- 4 confirmed partial responses [PRs].
The total Disease control rate [DCR] out of the 21 patients evaluable for efficacy was 57.1%. This is some pretty good data, and all these programs set up several catalysts to look forward to.
In terms of the phase 1 monotherapy study, there will be a data update expected in mid-Q3 of 2024. From there, the next data update to come out of this phase 1 program [likely U.S. and Japan] will be released in the 1st half of 2025. There is another opportunity for additional advancement regarding this program from Elevations’ pipeline. How so? That’s because it wants to explore the use of EO-3021 in combination with either an immunotherapy treatment or another drug targeting agent [maybe chemotherapy or other cancer targeting drug].
Either way, it is expected that the biotech will release its plans on initiating such a phase 1 trial with EO-3021 in a combination setting to target Claudin 18.2 expressing solid tumors. Again, the specific tumors to be targeted are: Gastric, gastroesophageal junction, pancreatic or esophageal cancers.
HER3-ADC Development Adds Another Shot On Goal For Pipeline
A good thing about Elevation Oncology is that it has another antibody-drug conjugate [ADC] that it is advancing. This would be regarding an ADC, known as HER3-ADC. This specific candidate is still in the early part of the clinical development process. That is because it is only in preclinical testing at the moment.
However, there is a catalyst opportunity for investors to look forward to regarding this particular program. It is expected that it will nominate a candidate targeting HE3-expressing tumors in the 2nd half of 2024. The way this candidate was developed is that its prior anti-HER3 monoclonal antibody-drug seribantumab has an attached cleavable valine-citrulline linker and monomethyl auristatin E [MMAE] payload to yield HER3-ADC1. This is an even stronger drug that has huge potential as an ADC, especially when you consider that its drug-antibody ratio is “4.”
Being that HER3-ADC is only being advance to target HER3-expressing solid tumor types, it is important to note the specific patient population that could be targeted. It has been shown that up to 42% of tumors express HER3. Thus, even if this company can only go after this specific subpopulation, this would still be a huge market opportunity for it. The thing is that some preclinical data from this program has already been released. Such data was revealed at the American Association for Cancer Research [AACR] Annual Meeting 2024. It was shown that an HER3-ADC of this caliber was able to achieve HE3-dependent cell killing and robust antitumor activity in vivo. However, such clinical activity was only observed in patients with high levels of HE3 expression.
The goal with this clinical candidate is to create a differentiated ADC that specifically targets HE3-expressing solid tumors. What is different? Well, for starters, it selectively binds to HE3-expressing cancers, while at the same time minimizing systemic exposure to healthy tissue. Plus, it has been able to improve upon other ADCs with different types of MMAE payloads. For instance, in a patient derived xenograft [PDX] model of pancreatic cancer, it was shown that HER3-ADC1 was able to regress the tumor. Whereas, another ADC with a different type of MMAE payload [deruxtecan] only had a modest efficacy effect on targeting this specific tumor type.
Financials
According to the 10-Q SEC Filing, Elevation Oncology had cash, cash equivalents and marketable securities of $104.1 million as of December 31, 2023. The reason for the increase for the cash on hand is because it has been consecutively raising cash with the use of an at-the-market [ATM] agreement. For example, in Q1 of 2024, it raised approximately $29.7 million under this ATM. Subsequently, after Q1 of 2024 end, it raised another $14.5 million through this very same financial agreement. In essence, it has been able to raise about $44.2 million year-to-date from this.
This means that it has a cash runway into 2026. Its cash burn is about $9.9 million per quarter.
Despite this cash runway, this doesn’t mean that it is not already gearing up to raise additional cash if an opportunity presents itself. What makes me say that? Well, that’s because it just filed an S-3 SEC filing form, whereby it could raise up to approximately $350 million. My bet, is that if the data to be released from the phase 1 study using EO-3021 in solid tumors turns out to be good, then management may not hesitate to raise cash almost immediately.
Risks To Business
There are several risks that investors should be aware of before investing in Elevation Oncology. The first risk to consider would be regarding the ongoing phase 1 study, which is using EO-3021 for the treatment of patients with advanced solid tumors. The goal is to release updated data this year, but there is no assurance that the results will turn out to be good. In addition, there is no way of knowing if they will match or exceed that, which had already been released by CSPC Pharmaceutical Group Limited from a different phase 1 sponsored clinical study.
A second risk to consider would be regarding the announcement of initiating a phase 1 combination study of EO-3021. Even though this ADC has been shown to work well in being able to treat patients with advanced solid tumor types, there is no assurance that deploying it in a combination regimen, will yield equivalent or superior monotherapy data. Nor that further advancement towards phase 2 and/or phase 3 testing will be done.
The third and final risk to consider would be regarding the development of the other ADC as part of Elevation’s pipeline. This would be regarding the use of HER3-ADC, which is being developed to treat patients with HE3-expressing solid tumors. Even though, as I have shown above, it has been able to achieve solid proof-of-concept data in being able to treat these patients with preclinical testing, there is no guarantee that similar data will be yielded when this drug is given to humans.
Conclusion
Elevation Oncology is gearing up for a major inflection point coming up. Again, this would be regarding the upcoming release of phase 1 data, which is using EO-3021 for the treatment of patients with advanced solid tumor types.
I believe that even if the monotherapy data doesn’t pan out, it may not mean a complete end to advancement of this ADC. That’s because of the already stated goal of being able to advance the use of it in combination testing. That is, to combine EO-3021 with another cancer drug. It remains to be seen if such a combination treatment can yield superior data, but it is worth exploring.
Especially, based on the clinical data that CSPC had already released from its ongoing phase 1 study in China. The potential for HER3-ADC is huge, especially if it can find a way to differentiate this candidate compared to other ADCs in clinical testing. Especially, if it can find a way to move forward with a better MMAE payload and other unique characteristics.
With an upcoming data release from the phase 1 U.S./Japan Study using EO-3021 for advanced solid tumor patients, plus the ability to advance another ADC with potential unique properties, I believe that investors could benefit with any potential gains made.
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