Finally, some good news for beleaguered shareholders of Culver City-based ImmunityBio Inc., who had watched their share values plunge roughly 90% in 14 months.
The immunotherapy company founded by billionaire Patrick Soon-Shiong is preparing to submit its first biologic drug to the U.S. Food and Drug Administration for evaluation and potential approval.
Earlier this month, ImmunityBio executives met with the FDA in a required “pre-application meeting” for a drug it calls Anktiva, which is being tested to treat certain types of bladder cancer.
The news of the pre-application meeting with the FDA came in the company’s recent quarterly earnings filing with the Securities and Exchange Commission. It followed an April press release that noted the company was preparing to file the biologic drug application and presentations at industry conferences describing the favorable clinical trial results that led the company to prepare its application. That application could be submitted as early as the end of this month.
The news about the pre-application meeting with the agency finally reached investors on May 12, the day after the stock closed at a record low $2.68 a share. In the four trading days that followed, ImmunityBio shares jumped 51%, closing May 17 at $4.04. The stock fell back on May 18, closing at $3.76.
“The results of the bladder cancer trial are being made more public,” Soon-Shiong – ImmunityBio’s executive chairman and global chief scientific and medical officer – said in an interview with the Business Journal. Patients who failed to achieve substantial improvement with a traditional drug to treat bladder cancer have been seeing more progress when that drug is paired with ImmunityBio’s biologic drug, he said.
“It’s validation of a long-held theory that we need to change the paradigm for treatment of cancer and infectious diseases,” he said. “We need to use T-cells and natural killer cells for treatment,” he added, referring to types of immune cells.
Long stock slide
Even with the recent 51% spike, ImmunityBio’s share price on May 18 was still down 90% from its closing price of $38.70 on the first day of trading in March 2021 following a reverse merger with another Soon-Shiong company, NantKwest Inc.
A major factor in the slide has been general weakness in small-cap biotech stocks. Since the end of February 2021, an exchange-traded fund of these small and mid-cap biotech stocks, known as XBI, has fallen roughly 60% in value.
“For these biotech stocks in general, the big issue has been the pushing out of clinical studies, due mostly to the pandemic,” said Sahak Manuelian, managing director and head of equity trading for downtown-based Wedbush Securities.
“For Phase 1, Phase 2 and Phase 3 studies, they’ve all had a tougher time enrolling patients and getting those patients to test sites during the pandemic,” Manuelian added. “And even if the clinical trials do get completed and new drug applications get sent to the FDA, there’s been a huge backlog at the FDA, which has understandably been focused on Covid therapies. This has been crushing the entire biotech complex.”
For Soon-Shiong, who owns or controls 314.2 million shares, or 78.8% of the total common shares of ImmunityBio, this plunge has taken the value of his stake from $12.16 billion to $1.18 billion, representing a loss of $10.97 billion from his net worth. Last year, the Business Journal ranked Soon-Shiong as the wealthiest Angeleno, with a net worth of $20.4 billion.
When asked if he might consider buying the remaining 21.2% of shares of ImmunityBio and taking the company private, Soon-Shiong flatly rejected the notion.
“No. I’m not focusing on the stock price. I’m focusing on the work,” he said.
Soon-Shiong added that the trajectory of ImmunityBio stock has been similar to an earlier company he founded: generic drug firm APP Pharmaceuticals.
“That stock dropped initially” he said. “But we had sufficient faith in the stock and things turned around.”
APP Pharmaceuticals sold for $4.6 billion in 2008 to German dialysis products company Fresenius.
Covid vaccine trials
The bladder cancer therapeutic is only one of nearly two dozen biologic-based drugs that ImmunityBio has in various stages of clinical trials. Thirteen of those drug candidates are aiming to treat various forms of cancer, while another nine are targeting two viruses: HIV and SARS-CoV-2, the virus that causes Covid-19.
ImmunityBio’s Covid-19 vaccine uses an adenovirus (a common cold virus) to transmit the vaccine into cells. The company claims that the vaccine’s ability to impact more than just the spike on the coronavirus makes it better suited to handle a wide range of Covid variants. What’s more, the vaccine is designed to be taken orally, which greatly reduces the physical support network necessary to vaccinate people when compared with needle jabs.
This Covid-19 vaccine is currently in clinical trials both in Orange County and South Africa.
The South Africa trial is designed to go through all three clinical trial phases; enrollment for the third phase began in January, according to the company’s annual report.
However, even if this vaccine is approved in short order by South African regulatory authorities, it won’t enter mass distribution until late this year – at the earliest.