Affimed: Data Readout Of AFM13 This Quarter Could Push Company Forward

Summary:

• Two poster presentations showing AFM24 as a monotherapy and combination treatment will be presented at the 37th Annual Meeting of the Society for Immunotherapy of Cancer, November 8-12, 2022.
• Results from the phase 2 registration REDIRECT study using AFM13 as a monotherapy for the treatment of patients with CD30-positive Peripheral T-cell lymphoma expected Q4 of 2022.
• With successful data from REDIRECT study, possibility to allow company to file a Biologics Licensing Application for AFM13 for the treatment of patients with peripheral T-cell lymphoma in 2023.
• Proof of concept of AFM13 has also been established in combination with natural killer cells in NHL patients, whereby a 100% objective response rate was achieved.

Affimed (NASDAQ:AFMD) is a great speculative biotech play to look into. That’s because it has a few catalysts before the end of 2022. The first catalyst of which will deal with two poster presentations. One poster presentation to be shown is that in which AFM24 monotherapy is being evaluated in a phase 1 study (AFM24-101) for EGFR expressing solid tumors, which is to be shown Thursday, November 10, 2022, from 9:00 a.m. to 9:00 p.m. EST. Then, there will be another poster presentation to be shown which is using AFM24 in combination with Roche (OTCQX:RHHBY) atezolizumab in study AFM24-102 for the treatment of advanced EGFR expressing solid tumors. Even though these are poster presentations, it will shed some light on whether or not AFM24 is a good drug candidate to move forward with. The more important data, which I believe is highly crucial for this biotech, would be data from the phase 2 registration REDIRECT study (known as AFM13-202) using AFM13 as a monotherapy for the treatment of patients with CD30-positive Peripheral T-cell lymphoma (PTCL). This data is important, because if it is successful, it could possibly allow Affimed to initiate the process of filing a Biologics Licensing Application (BLA) to the FDA for possible marketing approval for this patient population with AFM13. Results from this study are due any day now in Q4 of 2022. Top-line data is going to be reported which will highlight overall response rate (ORR) and duration of response (DOR).

AFM13 As A Monotherapy For The Treatment Of Patients With CD30-positive peripheral T-cell lymphoma

The first update to go over involves the main program in this biotech’s pipeline, which is using AFM13 as a monotherapy for the treatment of patients with CD30-Positive Peripheral T-cell Lymphoma. Lymphoma is a type of cancer that starts off in the lymph nodes or lymphatic system. The lymphatic system is highly important, because it fights off infections and viruses. The Lymphatic system is composed of several parts in the body which are:

• Lymph nodes
• Spleen
• Bone marrow
• Thymus gland

The thing is that there are two types of lymphoma that are categorized, which are either non-Hodgkin’s lymphoma (NHL) or Hodgkin’s lymphoma (HL). Now that this is out of the way, it is important to specifically note what peripheral T-cell lymphoma is? PTCL is when there is cancer that occurs in mature-stage white blood cells called T-cells and even natural killer (NK) cells. However, more so PTCL affects T-cells. Such T-cells grow abnormally, which is why it is considered to be cancerous. The term “peripheral” means that the cancer starts off in the lymphoid tissues outside of the bone marrow in those parts I noted above, like lymph nodes, spleen, gastrointestinal tract and skin. In addition, it is important to note that AFM13 specifically targets those PTCL patients who are CD30 positive. CD30 is a member of the tumor necrosis factor (TNF) superfamily. It is observed in several types of lymphomas, which is why it is a good target to go after. One other thing to note is that by focusing on CD30 positive patients, it is more probable that treatment with AFM13 will be successful because of it.

The most advanced study to keep track of is known as REDIRECT, which can also be noted as AFM13-202. It is a registration directed phase 2 study, which is exploring the use of AFM13 as a monotherapy to treat patients with relapsed/refractory CD30 positive peripheral T-cell lymphoma. This study is expected to enroll up to a total of 145 patients. The primary endpoint of the study is Independent Review Committee (IRC) confirmed Objective Response Rate. This is being measured across date of enrollment until either progression of cancer occurs or death for any cause. This endpoint will be tracked for a 24-month period. There is a catalyst opportunity as it relates to this registration data. Results from this REDIRECT study are expected during this Q4 of 2022, which could come any day now. It is a very important event for Affimed. That’s because if this trial meets the primary endpoint, then it can move towards possibly filing for regulatory approval of AFM13 as a monotherapy for the treatment of patients with relapsed/refractory CD30 positive lymphomas.

It’s hard to say for sure if the study will be successful, but I can point to prior results to prove that AFM13 is active as a drug in this patient population. These are positive results that came from a phase 1/2 study, which used AFM13 monotherapy to treat 15 patients with T-cell lymphomas and cutaneous involvement. It was noted that the final objective response rate was 44%. In a prior update in 14 patients given AFM13 the ORR was 42% (6 patients out of 14 patients responded. It was good to see that the addition of another patient saw an increase in the ORR. It’s important to keep in mind that this was a low number of patients (about 14 to 15). A similar or superior outcome needs to be observed in the phase 2 registration directed REDIRECT study, which is recruiting up to 145 patients. Hopefully the clinical results from this registrational study meets the primary endpoint. As I noted above, if the primary endpoint is met, then that would open the door for the biotech to file a BLA for AFM13 as a monotherapy for the treatment of patients with CD30 positive lymphomas.

Financials

According to the 6-K SEC filing, Affimed N.V. had cash and cash equivalents of $232.4 million as of June 30, 2022. It also obtained some revenue from its collaborations it has with Roche and Genentech, which was $7.15 million in the most recent quarter. Another reason for the current cash on hand is that it enacted a public offering. This is where it sold 22,500,000 shares of its common stock at a public offering price of $4.00 per share. In addition, the underwriters took their option to purchase up to an additional 3,375,000 shares of common stock at the very same offering price. In total, about 25,875,000 shares of common stock were sold allowing Affimed to generate about $103.5 million. It estimates that it has enough cash to fund its operations into mid-2024. I believe if it does enact another cash raise, then it will likely do so in mid-2023. It may choose to raise cash earlier if it announces positive data from the phase 2 registration directed REDIRECT study, which is using AFM13 as a monotherapy for the treatment of patients with CD30 positive Peripheral T-cell Lymphoma. If the primary endpoint is met, plus it causes the stock to trade higher, then I have no doubt it will take advantage and likely raise cash immediately. The reason why is because it will need funding to launch the drug commercially. Either that, or if it can somehow find a partner to help fund it.

Risks To Business

There are several risks that investors should be aware of before investing in Affimed. The biggest risk would be the upcoming data readout from the phase 2 REDIRECT study, which is using AFM13 as a monotherapy for the treatment of patients with CD30 positive peripheral T-cell lymphoma. These results are expected any day now during Q4 of 2022 and there is no guarantee that the primary endpoint will be met. The primary endpoint is the objective response rate over a 24-month period, as assessed by an Independent Review Committee (IRC). Even if the primary endpoint is met, the next event to be achieved would be positive feedback from the FDA. That is, whether or not the FDA would allow the company to file a BLA of AFM13 for this patient population based on the data achieved. There is no assurance that the FDA will accept the BLA filing of AFM13. Another risk to consider would be the upcoming poster presentation updates of AFM24 to be presented at the upcoming 37th Annual Meeting of the Society of Immunotherapy of Cancer (SITC) conference. There is no guarantee that the data to be shown in the posters will be viewed in a positive manner by investors or the stock market. The final risk to consider would be with respect to the cash position. It states that it believes it has enough cash to fund its operations into mid-2024. However, it likely won’t wait until then to raise cash, as such I believe it may need to raise funds again by mid-2023. It may need to raise cash sooner if it is able to file a BLA for AFM13 for the treatment of patients with CD30 positive peripheral T-cell lymphoma. In that case, I think it will raise cash way before then.

Conclusion

Affimed is a great speculative biotech play to look into. I think it has a shot at doing well in the coming year. The two main reasons why I believe this to be true is, because it has been able to establish proof of concept in using both AFM13 as a monotherapy and also in combination with natural killer cells. With a readout of the registrational study known as REDIRECT, which is expected to be released any day now in Q4 of 2022, that puts this company one step closer to possibly being able to file for regulatory approval of AFM13 for the treatment of patients with CD30 positive peripheral T-cell lymphoma. In my opinion, while I think the primary endpoint has a good chance of being met for the REDIRECT study, there is no guarantee of it happening. Still, that doesn’t mean that this biotech will be useless on this trial failure. I think it would still have promise with respect to the combination programs that are ongoing, as opposed to AFM13 monotherapy only. For example, the biotech showed that AFM13 together with NK cells saw some impressive data in NHL patients. What was impressive is that after a second cycle of treatment, at the recommended phase 2 dose (RP2D) level, it was noted that the complete response increased from 38% to 62%. The overall objective response rate remained at 100%. With a few catalysts approaching before the end of 2022, plus proof of concept being established with AFM13 both in monotherapy and as a combination therapy, I believe this is a great speculative biotech play to look into.

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