Chimeric Therapeutics Ltd: Adding to the Pipeline with a Clinical Platform Technology

Three world-class partners in discovery
With the new option to license the Clinically Validated, Off the Shelf, Robust, Enhanced, Natural Killer Cell Platform (CORE-NK) with CWRU, CHM has the opportunity to add a third partnership to its portfolio, including its partnerships with The University of Pennsylvania (Penn) for its CHM 2101 pre-clinical stage CAR T and City of Hope (COH) Cancer Center in Los Angeles for its CHM 1101 clinical-stage CAR T technology. This technology is more clinically validated than its CLTX and CDH17 CAR T technologies, as there has been a Phase I trial completed, with results pending (expected 2022). The platform technology can be leveraged for multiple new therapies, and CHM has several new clinical programmes planned for 2023 in blood cancer and solid tumours. The platform is a complement to its existing technologies, as it is allogeneic, meaning it can be used “off the shelf” for patients, rather than autologous, which is specific to each patient. CHM’s pipeline will now expand to seven unique assets with eight clinical trials planned by 2023. Diversification of its portfolio with stages of development, partners and therapies for both solid tumours and now blood cancers enhances opportunities and its pipeline.

New therapy pipeline to enhance CAR T
We believe this deal positions CHM well for future partnerships, out-licensing and collaborations. An expansion of the pipeline across both autologous and allogeneic technologies, and from early pre-clinical to late Phase I clinical therapies, is significant. If CHM licenses the CORE-NK platform, its pipeline will be expanded to include five new cell therapy assets, and will extend the clinical development programme with eight total trials by 2023. CHM has identified multiple programmes for its technologies, with its CAR research combining with the platform to create new potential CAR NK therapies as well as potential therapies from the CORE-NK platform. As a result of the expansion of the programmes, CHM has reorganised its team, including adding a Programme Manager, elevating Dr. Eliot Bourk to Chief Business Officer and Head of External Innovation, and adding a Head of Clinical Development role. The new pipeline will broaden CHM’s ability to find partners or out-licensing opportunities, including in blood cancers and solid tumours.

Mid-case valuation remains $0.74/share
Our valuation remains unchanged as CHM has secured an exclusive option to negotiate a license agreement. CHM has not disclosed the quantum of upfront funding and any future milestone and royalty payments, however it has indicated that the upfront fees are fully funded from its cash reserves. We would expect more news flow from the company based on its significantly expanded milestone timeline, with a particularly busy 2022. We have looked at a potential value for the platform technology being used as a treatment for acute myeloid leukaemia (AML), just one of the several therapies under investigation, and have arrived at a potential value of US$41m or A$56m, or $0.17/share (this is discussed on page 4 of this report). This exercise serves to highlight the additional value the leadership team is bringing to the table. Our existing valuation utilises a risk-weighted valuation to our forecasts for the GBM opportunity, arriving at a valuation range of $0.50-$0.93/share with the mid-point at $0.74/share, based on the current share count. On a fully diluted basis for all options on issue, the mid-point valuation is $0.69/share. Our valuation is solely based on the opportunity for CHM 1101 for recurrent glioblastoma. As we highlighted in our 29 November initiation report Building a pipeline of expertise, further upside could be obtained from the advancement of CHM 1101 to Phase II with GBM; the commencement of a Phase I frontline GBM study; the application of CHM 1101 to other indications; the advancement of CDH17 CAR T from pre-clinical to Phase I and from the acquisition of other portfolio opportunities.