Chimeric Therapeutics Ltd - Entitlement Offer to Raise up to $18.1M

World-class partners in discovery

CHM is the only company listed on the ASX conducting human clinical trials with CAR T cell therapy. CHM has licensed the CLTX CAR T from the City of Hope Cancer Centre in Los Angeles for the treatment of patients with glioblastoma, as well as to research additional indications for the CLTX CAR T. The CLTX CAR T therapy is in a Phase I clinical trial which has been designed with four dose levels and studies both single and dual routes of administration of cells. It is currently recruiting for its third dose level for this trial. CHM has also exclusively licensed the pre-clinical phase CDH17 CAR T from the University of Pennsylvania, the leading university for cell therapy patents. CDH17 CAR T is being studied in treatment of gastrointestinal cancers and neuroendocrine tumours. Additionally, CHM entered into an exclusive option to license the CORE- NK platform from Case Western Reserve University (CWRU), expanding the pipeline to four new Chimeric assets to initiate development in 2022. The CHM strategy is to build a pipeline of therapies which can help mitigate the high risk associated with biotechnology discovery, development and commercialisation.

Rapid progress made since listing in diversifying portfolio

Chimeric Therapeutics has been active in both business development and progressing its portfolio assets. In February, CHM announced the first patient in the third dose level of its CLTX CAR T cell clinical trial of the Phase I CHM 1101 trial in recurrent GBM, has been initiated at the City of Hope. In January, CHM announced it had secured a US patent covering applications of CAR technology using chlorotoxin (including CHM’s 1101 and the optioned CAR NK asset CHM 1301), and announced a three-year SRA with the University of Pennsylvania. The research will focus on furthering the development and understanding of CHM 2101 and on identifying CDH17-directed, follow-on candidates and will be funded by some of the proceeds of the entitlement offer. CHM is also progressing toward a Phase I clinical trial for CHM 2101 in neuroendocrine tumours and gastrointestinal adenocarcinomas. We believe CHM is positioned well for future partnerships, out- licensing and collaborations via its diversified and expanding assets. An expansion of the pipeline across both autologous and allogeneic technologies, and from early pre-clinical to late Phase I clinical therapies, is significant, in our view, and broadens the appeal of the company to both investors and potential future partners. Earlier this year, we explored the 2022 outlook for CHM in an interview with Managing Director and CEO Jennifer Chow which can be Accessed here.

Mid-case valuation maintained at $0.74/share

Our valuation remains unchanged as CHM progresses its clinical and pre-clinical assets, and has not been updated for the entitlement offer given the retail compenent is open until March 11. We are also looking for a completed deal on the option with CWRU or a new clinical trial before addressing our valuation. We have looked at a potential value for the platform technology being used as a treatment for acute myeloid leukaemia (AML), one of the therapies under investigation, and have arrived at an additional potential value of US$41m or A$56m, or $0.17/share (discussed in our Update Report 17 December 2021). Our 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. As we highlighted in our 29 November initiation report Building a pipeline of expertise, further upside could be obtained from the advancement of current clinical studies, commencement of new clinical studies and via corporate activity.