MBIO: Mustang: A Steed on the Fast Track

0
32
This post was originally published on this site

NASDAQ:MBIO

Recognized as an innovator in the chimeric antigen receptor (CAR) engineered T cell (CAR-T) space, Mustang Bio (NASDAQ:MBIO) has focused its efforts on immuno-oncology indications since its inception in 2015. The company targets both liquid and solid tumors using CAR-T and has built a facility to supply manufactured cell products for clinical trials and commercial production. Despite this emphasis and progress with MB-102, Mustang acquired an existing gene therapy program with promising clinical data and a clear path to registration via expedited pathways. The gene therapy program, designated MB-107, may provide a potential cure for X-linked severe combined immunodeficiency (X-SCID) and leverage Mustang’s competency in cell processing. The company is in the process of assuming responsibility for the program, which consists of two studies, and is building out its facility to support global development of the gene therapy.


View Exhibit I – Mustang Bio Logo

Mustang Bio is 40% owned by Fortress Biotech, Inc. (NASDAQ:FBIO). Fortress provides shared financial, legal, scientific, business development and regulatory services to incubated companies as well as strategic guidance from their experienced biotechnology portfolio managers. It has helped Mustang accumulate intellectual property for their pipeline of seven candidates and has developed the company to a point where it has established its own headquarters and manufacturing facility in Worcester, MA. Below we list Mustang’s gene and CAR-T therapy programs.


View Exhibit II – Pipeline

The company has initiated work on six candidates in hematologic malignancies and solid tumors. Mustang’s academic partners are now conducting Phase I trials for its acute myeloid leukemia (AML) and non-Hodgkin lymphoma (NHL) candidates and expect to start an additional Phase I in multiple myeloma (MM) in the next few months. Phase I programs are underway in the solid tumor space targeting IL13Rα2 for glioblastoma multiforme (GBM) and HER2 for GBM and metastatic breast cancer to brain. The final effort here will target prostate and pancreatic cancer via the prostate stem cell antigen. An IND application is expected in 2Q:19.

MB-102 (CD123) Status
Mustang plans a 1Q:19 initiation of its first multicenter trial conducted under its own IND, with patients’ cells processed in its own manufacturing facility. The subject of this IND will be the CD123-directed CAR-T, designated MB-102. Data from nine patients enrolled in the ongoing single-center Phase I trial of MB-102 being conducted by City of Hope (COH) were presented at the November 2018 AACR Tumor Immunology & Immunotherapy meeting. COH investigators observed complete responses (CRs) in three of five AML patients at the second dose level. In a second arm enrolling patients with a related disease known as blastic plasmacytoid dendritic cell neoplasm (BPDCN), both patients enrolled demonstrated a complete response at the starting dose level. The safety profile was excellent in all nine patients, with no dose-limiting toxicities and only grade 2 cytokine release syndrome and grade 2 neurotoxicity. Dose escalation continues on both arms of the trial.

MB-107 Acquisition
In August of this year, Mustang added its seventh program and entered into an agreement with St. Jude Children’s Research Hospital to take over the development of a gene therapy intended to treat X-SCID, also known as bubble boy disease. The company’s competency in cell processing and recent opening of the Worcester manufacturing facility make Mustang a natural fit for the development project. The regulatory path is relatively straightforward, and the therapy may qualify for a number of accelerated approval pathways including fast track, regenerative medicine advance therapy (RMAT), breakthrough and orphan drug designations. Additionally, there are a number of similarities between the CAR-T and gene therapy manufacturing processes that make assuming the X-SCID program an easy transition.

Mustang’s agreement is an exclusive, global license with St. Jude Children’s Research Hospital to take over its Phase I/II program for X-SCID. The program has already enrolled eight newly-diagnosed patients in two centers located at St. Jude and at UCSF Benioff Children’s Hospital in San Francisco, and Seattle Children’s Hospital was added in August 2018 as a third center in order to increase accrual and shorten the length of the trial. The arrangement requires a small upfront payment with additional maintenance fees and milestones as the therapy progresses through development and regulatory approvals. Mustang is currently assembling its infrastructure so that it can assume the program from St. Jude and has named the candidate MB-107, representing the seventh addition to the company’s portfolio. Following the completion of the trial, we expect Mustang to submit a biologics license application (BLA) to the FDA.

Cell Processing Facility
Mustang completed the build-out of 13,000 square feet of its 27,000 square foot space for its cell processing facility this year. It is located on the University of Massachusetts Medical School campus, with a central location in Biotech Park. The asset is expected to provide product supply for all of the company’s programs. Finished spaces include the preclinical research lab, quality control lab, analytical development lab and four cleanrooms. The four cleanrooms are expected to be able to generate sufficient product to provide cell therapy for 500 to 750 patients per year. The unfinished portion of the facility will be partially built out to EU standards to support product development for approval in that region.

MB-107: X-SCID Gene Therapy
In partnership with St. Jude, Mustang Bio is developing an ex vivo lentiviral gene therapy to treat and cure X-linked severe combined immunodeficiency. The process transduces the patient’s own hematopoietic stem cells with the correct copy of the IL2RG gene, also known as the common gamma (γ)-chain. The combined cellular and humoral immunodeficiency is caused by a mutated X-linked gene which occurs in male newborns. The lentiviral vector used encodes the common γ-chain and avoids activating the LMO2 oncogene, enhancing the level of safety compared to previous gene therapy approaches.


View Exhibit III – Common Gamma (γ)-Chain1

Lentiviral Vector (LV) Delivery
Viral vectors are commonly used to transduce cells and deliver a desired DNA sequence. LVs are able to efficiently shuttle a normal copy of the common γ-chain gene into hematopoietic stem cells and integrate it into the host genome. In contrast to retroviral vectors, LVs are able to infect both dividing and non-dividing cells and can accommodate larger transgenes up to 10 kilobases. LV characteristics also make it particularly suitable for ex-vivo gene therapy. In many cases a self-inactivating (SIN) LV will be used to reduce errors as it removes the promoter and enhancer thus reducing the impact on adjacent genes.

MB-107 uses a lentiviral gene transfer which positions a normal copy of the gene in bone marrow cells. The lentivector used is a SIN LV with an insulator and a short promoter which encodes the common γ-receptor chain. It demonstrates improved safety with respect to oncogene activation. St. Jude maintains the LV producer cell line. Below is the schematic for the LV.


View Exhibit IV – St. Jude / NIAID X-SCID Lentivector

How Does Gene Therapy Work?
Gene therapy was first tested in humans in 1990 in treatment for adenosine deaminase (ADA) deficiency. Two girls, ages four and nine, were selected to receive the treatment and their white blood cells were removed, inserted with the proper gene sequence then reintroduced. The results were successful and two years after the completion of the therapy, white blood cells continued to express the replacement ADA gene. The girls continue to thrive.


Exhibit V – Dr. Blaese with 1990 Gene Therapy Patients in 2013

Since this time the use of the viral vector used to deliver the proper gene has improved and several gene therapies have been approved by the FDA and EMA including Glybera, Strimvelis, Kymriah and Yescarta. There are other therapies currently in development for cystic fibrosis, hemophilia, glaucoma and many other indications spearheaded by small and large pharma alike.

In simple terms, gene therapy follows several steps beginning with identification of the missing gene that contributes to the disease. Next is the creation and installation of the gene into the genome of a viral vector which is used to infect the targeted cells. This allows the missing gene to express the desired protein using the patient’s normal cellular mechanisms.

X-Linked Severe Combined Immunodeficiency (X-SCID)
Patients that suffer from X-SCID present defects in the common γ-chain which prevents lymphocyte and other immune cell development. The disease is characterized by an absence of key immune cells. The absence of T cells and natural killer (NK) cells as well as the lack of function of the patient’s B cells exposes the patient to opportunistic infections. The rare genetic disorder leaves patients susceptible to bacteria, viruses and fungi. Infants present with chronic diarrhea, thrush and skin rashes. Ear infections, pneumonia, meningitis, and sepsis are also common in the first few months of life. If the disease is not treated quickly, death will occur.

X-SCID is caused by mutations in the IL2RG gene which provides instructions for a protein known as the common gamma (γ) chain. The protein is part of a number of interleukin receptors that contribute to immune system development and function. Without the gamma chain, lymphocytes do not mature, proliferate or mobilize. Boys almost exclusively present with X-SCID because they only have one X-chromosome and do not have a spare normal gene to compensate for the mutation.


View Exhibit VI – IL2RG Gene Molecular Location2

In most states, newborn screening includes testing for X-SCID, allowing for rapid diagnosis and treatment. If the disease is not discovered through a test, signs usually present themselves within three to six months after birth. Maternal antibodies persist in the first few months of life, but as they fade, the infant’s immune system is not able to fight infection. Following this period, X-SCID patient’s symptoms include a failure to thrive, infections of the mouth or anus, and other recurrent infections, as well as absence of tonsils and lymph nodes and frequent diarrhea.

Following diagnosis, treatment requires a bone marrow transplant or gene replacement therapy. If a patient has a matched sibling donor (MSD), success of a bone marrow transplant is in excess of 90%. However, if a matched other related donor (MORD) or a mismatched or unrelated donor contributes the stem cells, then survival rates are much lower. Patients who receive a transplant but do not have a MSD suffer a poor quality of life due to recurrent infections, diarrhea, graft vs. host disease and the need for lifelong immunoglobulin infusions to compensate for low levels or absent antibodies. There have been several gene therapy trials launched for X-SCID, which have employed a variety of vectors; however, complications have arisen including a lack of persistence, retrovirus integration, the need for lifelong intravenous immunoglobulin (IVIG) therapy and the onset of leukemia. These shortcomings have created an opportunity for an improved approach and highlight an unmet need.

While X-SCID is the most common of the severe combined immunodeficiency diseases, it is still very rare. It presents in about one or two births per 100,000 according to the National Institute of Health (NIH). According to Mustang, the addressable market for X-SCID patients who have significant impairment of immunity despite hematopoietic stem cell transplantation is about 1,000 to 1,500 in the United States and a similar number in the EU.

MB-107 Clinical Trials
There are currently two clinical trials underway that employ the same lentiviral vector and may be eligible to be combined under a single BLA. The larger trial is the St. Jude effort which involves a Phase I/II gene therapy study for newly diagnosed infants with X-SCID. The other trial is also a Phase I/II study and is sponsored by the National Institute of Health (NIH). The NIH trial is enrolling patients who are older than two years and are experiencing recurring infections despite prior hematopoietic stem cell transplant. The St. Jude trial has eight data-generating patients while the NIH trial has enrolled five patients.

St. Jude began its trial enrolling newly-diagnosed children and employing its proprietary lentivirus producer cell line to transduce cells in an ex vivo process. The eight patients that have been treated ranged from two to 13 months of age at the time of treatment. Results have been favorable, with meaningful improvements in T cell count and function, B cell function and resolution of infections. Six of the eight patients achieved reconstituted immune systems within ten months of treatment, and the remaining two patients are progressing well with shorter follow-up. Four of the six patients with reconstituted immune systems have discontinued monthly infusions of IVIG.

The NIH trial has been running since 2011 and has treated five patients to date, ranging from 10 to 23 years of age. All five of the patients have presented evidence of gene marking for T, B, NK and myeloid cells and repair of T cell immunity. The two older patients have demonstrated immune system reconstitution and clinical improvement with two and three years of follow-up, respectively, and produced antibodies following vaccination. The three younger patients have also produced gene-modified immune cells with up to nine months of follow-up. Following treatment, all patients exhibited a decrease in viral infections and an increase in protein absorption.

Safety has been a strong point in both studies, and there is no evidence of pre-cancerous cell proliferation or vector insertional leukemogenesis. One patient in the NIH study died two years following therapy due to pre-existing lung damage, and the death was considered unrelated to therapy.

The trials are using a treatment regimen similar to that used for CAR-T cell therapy, which explains the rationale for Mustang’s acquisition of the program. Compared to earlier treatment protocols for X-SCID, low-dose busulfan has been added as an alternative to total body irradiation to prepare the bone marrow for engraftment of the gene modified cells, to improve the safety profile of the procedure and to promote reconstitution of B cells. Below we summarize the process used to treat the patient using gene therapy with MB-107.

1) An autologous cell source is identified, which is the patient’s own bone marrow for newborns and mobilized peripheral blood stem cells for previously transplanted patients
2) The removed cells are taken to the laboratory where they are enriched using a magnetic column
3) Extracted cells are transduced with a lentiviral vector which encodes the IL2 receptor γ-chain
4) Gene modified cells are harvested
5) Cells are cryopreserved
6) Patient is pretreated with busulfan
7) Patient is infused with the gene-modified cells

Timeline
Mustang satisfies the constraints for several expedited approval routes including breakthrough, orphan drug and RMAT designations. These can allow for a closer working relationship with the FDA, the use of surrogate endpoints and early approval. The current timeline calls for a transition of the program from St. Jude and the NIH to Mustang over the next two years and simultaneous interaction with the FDA to secure expedited consideration for MB-107. Mustang and St. Jude will also attempt to incorporate the NIH patients into a single submission and submit a BLA anticipated in mid-2022. The number of patients required for approval and the requisite duration of follow-up for these patients will be discussed with the FDA in the first half of 2019. Parallel with the clinical and regulatory efforts, Mustang will build out a portion of the unfinished space in the manufacturing facility to conform to EU regulations in order to serve X-SCID patients in Europe.

Summary
Mustang Bio was initially incubated with a focus on immuno-oncology and a mission to employ a CAR-T platform to develop a variety of compounds for blood and solid tumor cancers. To differentiate itself, Mustang built a cell processing facility expected to support all of its IND activities which has increased the company’s opportunity set to include all cell therapies. Recognizing their own competency with gene therapy and the value of the St. Jude X-SCID program, Mustang acquired global rights to what is now identified as MB-107, a lentiviral gene therapy to treat and cure X-SCID. While the incidence of the disease is only 1 or 2 per 100,000, the addressable population is from 1,000 to 1,500 in both the US and EU. The small population and use of gene therapy open up a variety of expedited regulatory pathways for the biologic process which is expected to get a BLA in front of the FDA by 2022. We see the acquisition and assumption of the X-SCID program as auspicious positives for Mustang given the favorable efficacy and safety shown to date, as well as the company’s competency with cell processing and ownership of cell processing assets.

SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR. 

DISCLOSURE: Zacks SCR has received compensation from the issuer directly or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks provides and Zacks receives quarterly payments totaling a maximum fee of $30,000 annually for these services. Full Disclaimer HERE.

________________________________________
1 Image sourced from Rochman Y, Spolski R, Leonard WJ.New insights into the regulation of T cells by gamma(c) family cytokines. Nat Rev Immunol 9:480-490
2 NIH U.S. National Library of Medicine, Genetics Home Reference, IL2RG Gene. https://ghr.nlm.nih.gov/gene/IL2RG#location