ITUS: an Exciting Cancer Story, Part 2(a)

A recent addition to the Tailwinds Select Portfolio, ITUS Corporation is a compelling young biotech startup located in San Jose. Led by Dr. Amit Kumar, a well-regarded scientist and business leader who is a board member of the American Cancer Society among other accomplishments, ITUS is pursuing a dual-pronged business strategy in cancer diagnosis and treatment.

As detailed last week in Part 1 of our initial coverage, ITUS is developing what could be a breakthrough blood test for cancer diagnosis. The market for an accurate, non-invasive, and inexpensive cancer diagnostic would be huge. This alone could make ITUS into a significant company. However, just as exciting is their other initiative which revolves around a license with the Wistar Institute for a breakthrough CAR-T therapy for ovarian cancer.

It’s important to note, however that, ITUS doesn’t currently have their license agreement completed with Wistar; as of now, they have an exclusive option to negotiate a license. Therefore, until the deal is signed, it would be pre-mature to discuss the therapy in great detail. As such, we decided to break this week’s piece into two parts.

This first piece will discuss the importance of signing a license agreement on this CAR-T therapy. If, as we expect to happen, ITUS signs a final licensing agreement with Wistar, our next piece will discuss in further detail the drug in development, including the necessary steps to take it to the FDA, a timeline, and the cost associated with development.

ITUS has an exclusive to negotiate with Wistar that lasts until the 14th of November. Which means that, by Tuesday, we should have an answer as to whether or not they have locked down the drug license. Assuming that they do so, what exactly will ITUS have?

Wistar is one of the leading cancer research institutes in the country as per the National Cancer Institute. A team of scientists and physicians there, led by Dr. Jose Canejo Garcia, M.D. Ph.D. and Dr. Alfredo Perales-Puchalt, M.D., Ph.D., identified a therapeutic target that is found on a large percentage of ovarian cancer cells, but not on other tissues in adult women.

The target is the Follicle Stimulating Hormone Receptor, and because it already has a natural existing ligand (a molecule that binds to the receptor), T-cells can be engineered to attach to the cancer cells with the receptor. By targeting this receptor, the team was able to demonstrate excellent results, both in the lab and in animal studies, for treating this cancer. I will talk more about the details behind this therapy, and why it could be revolutionary in Part 2(b).

While the therapy is admittedly early stage, the results were compelling. This is not only for the obvious reason that developing a cure for ovarian cancer would be phenomenal, but because ovarian cancer is a solid tumor. Which means that the license ITUS is seeking would be for the first, if successful, CAR-T therapy for solid tumors!

Chimeric Antigen Receptor T-Cell (CAR-T) therapies is the hottest space in cancer-focused biotech right now. Personalized therapies targeting cancer through T-Cell manipulation are showing dramatic results against heretofore deadly diseases. Novartis recently received the first FDA approval for a CAR-T therapy, Kymriah, followed shortly by KITE and their drug Yescarta.

These therapies, even in early stages, are commanding hundreds of millions, if not billions, in market cap for the developers. The aforementioned KITE, as an example, is being acquired by Giliad for roughly 12 Billion dollars. If ITUS can lock down their license agreement with Wistar, we could possibly see them achieve a major valuation boost into the hundreds of millions in market cap just based on this therapy alone.

In addition, if ITUS can achieve this license agreement, it highlights their ability to negotiate and capture one of the hottest technologies in biotech.  Based on deals that are happening in this space, one has to assume that other larger companies would be interested in this technology.  This license would demonstrate that ITUS’ management is able to compete with some of the largest and richest biotech and pharmaceutical companies in the world as ITUS was able to convince Wistar to first give them first an exclusive option and then a final license.

The deadline for signing a license is two days away. ITUS is a compelling investment based on just their efforts in cancer diagnosis. If they can get their license agreement, they will have two exciting programs under development. We are keeping a close eye on these developments and if, as we suspect will happen, ITUS can land their CAR-T license, we will be out with a detailed piece about that half of their business.

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