Jounce Therapeutics (JNCE:NASDAQ) continues to advance its key products in the clinic, with 2022 being a big year for catalysts in the form of trial results, ROTH Capital Partners analyst Zegbeh Jallah reported in a Nov. 5 research note. Jounce develops cancer immunotherapies and predictive biomarkers.
"We are quite encouraged by Jounce's progress and enthusiastic about its 2022 outlook," she wrote.
One of the studies expected to read out in 2022 is SELECT. This Phase 2 is evaluating vopratelimab plus pimivalimab versus pimivalimab alone in nonsmall cell lung cancer patients. Vopratelimab, Jounce's lead product candidate, is a monoclonal antibody and ICOS agonist. Pimivalimab is a PD-1 inhibiting monoclonal antibody intended for combination use.
The study results "should validate Jounce's unique biomarker strategy for improving outcomes," Jallah wrote.
Results are also expected in 2022 for the INNATE Phase 1 trial evaluating JTX-8064, a LILRB2 (ILT4) receptor antagonist, as a monotherapy.
Also in progress is a Phase 1 dose escalation basket study evaluating JTX-8064 monotherapy and JTX-8064 plus pimivalimab or pembrolizumab, in PD-1-naive and PD-1 experienced patients.
Jallah pointed out that data from Merck's MK-4830 program, also targeting LILRB2, "continue to help derisk Jounce's efforts." Results showed MK-4830 elicited responses in patients who had primary resistance on prior anti-PD-1 therapies. This indicates reprogramming of the tumor microenvironment.
"Efficacy in this difficult-to-treat patient population could be a nice avenue to an accelerated approval pathway," Jallah commented.
These data also showed no correlation between PD-1 and LILRB2. Thus, targeting both should interfere with T cells and myeloid dendritic cells, two nonoverlapping resistance mechanisms, to elicit responses.
"We are bullish on the 2022 (INNATE) update and would expect strong efficacy with combo therapy," wrote Jallah. "Some refining of biomarkers may be needed to enhance monotherapy efficacy in certain cohorts."
Also noteworthy, Gilead's Phase 1 study evaluating GS-1811/JTX-1811, Jounce's CCR8 antibody, should showcase the immuno-oncology approach of Jounce and result in future milestone payments to it. The firm is eligible for up to $660 million ($660M) in future clinical, regulatory, and commercial milestone payments. On top of that, Jounce is entitled to high single-digit to midteen double digit royalties based on worldwide sales, which ROTH believes, Jallah said, "in totality will be a blockbuster opportunity."
She added, "We are certainly encouraged by the cash influx but even more so by the validation by large pharma, which may attract additional partners for Jounce's broader immuno-oncology platform."
Lastly, Jallah relayed, Jounce had $249M in cash and cash equivalents at the end of Q3/21, enough to see it through the upcoming clinical trial updates.
ROTH Capital Partners has a Buy rating and a $15 per share price target on Jounce, the current share price of which is about $9.61.
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Disclosures for ROTH, Jounce Therapeutics, Nov. 5, 2021
ROTH makes a market in shares of Jounce Therapeutics and as such, buys and sells from customers on a principal basis.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from
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