$AFMD ARTIVA NK Cells In/MD Anderson NK Cells Out—Key Takeaways from Management

AFMD's partnership with Artiva, in our view, was a logical progression from a business perspective. However, we think the partnership somewhat resets AFM13's CD30+ve r/r lymphoma story. While management feels they can avoid a dose escalation study, AFMD still has to prove AFM13 co-administered with AB101 can match, if not exceed AFM13-104, which continued to show deep and durable responses in its ASH update. Management notes the pre-clinical data for AFM13 + AB101 is not far off from MD Anderson's pre-clin work that led to AFM13-104. The 6M units of IL-2 needed to activate AB101 is something we'll be watching, but Artiva notes this dose is well tolerated without safety issues. Overall, we think Artiva brings AFMD a scalable allogeneic NK cell source that paves a path to commercialization. Until then, the Street's focus will be on AFM13's REDIRECT readout for r/r PTCL (4Q22) and the FDA's feedback (early 1Q23) for a registration directed r/r Lymphoma study.

Shifting AFM13 to co-administration with NK-cell was done for sake of development speed and patient access. The decision to move away from a pre-complexed product was done to take advantage of AFM13 and AB101 individually having INDs on file at the FDA, and with both being in clinical trials which should result in faster development of AFM13 co-administered with AB101. AFMD and Artiva also felt the pre-clinical data supported there wasn't too much variance in activity between pre-complexed and co-administration.

AB101's pre-clinical co-administration data is not that far off from MD Anderson's pre-clin data. Per management, the pre-clinical work done by Kerbauy et al. with MD Anderson's (MDA) cord blood derived NK cells is the best comparison to AFM13 + AB101's pre-clinical data. Notably, in-vitro data from MDA's NK-cells looked comparable to AB101’s data when pre-complexed with AFM13 and when co-administered. In-vivo mouse data also showed tumor growth was fully inhibited via when co-admin.

AFMD and Artiva do not expect IL-2 to cause safety issues. 6M international units (IU) of IL-2 is needed to activate AB-101, which is similar to what was used in some of FATE's early FT516 studies without safety issues. Management also pointed out the 6M units of IL-2 is roughly a couple orders of magnitude less than the approved dose needed for RCC patients and other IL2 approved indications.

Still committed to AFM13's monotherapy REDIRECT trial for r/r PTCL. Management iterated the exploratory arm for AFM13 + AB101 in r/r PTCL is not a sign that AFMD is less confident in AFM13's REDIRECT data. AFMD notes they have not seen REDIRECT's data, which is slated to readout in mid-Dec via PR (not at ASH). For AFM13 to garner an accelerated pathway, management believes REDIRECT's ORR would have to be in the mid-20% area with DoR of 8-9 months. Our base case is that REDIRECT posts an ORR of 35% with DoR at 8-9 months.
AFM13-104 ASH update continues to impress. At the RP2D/dose level 3 of 108 NK cell/kg, the ASH update showed a 100% ORR (24/24 DL3 patients) with a CR rate of ~71% (17/24 DL3 patients). This builds on April's AACR update, which also had 100% ORR (13/13 DL3 patients) with a CR rate of 62% (8/13 DL patients). Safety was also clear with no cases of CRS, ICANS or GVHD.

AFM24 + Atezo data color. As of Aug 2022, enrollment for dose level 1 was complete with dose level 2 underway. Most of SITC data will focus on dose level 1, which amounts to
a single-digit patient count. As for AFM24-101's monotherapy abstract, this will mostly focus on translational aspects—dose expansion data will not be available this year.

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