Company Executing On Its Plan; J&J-Aduro Deal Underscores the Advaxis Opportunity

Advaxis (Nasdaq: ADXS) is an emerging biopharmaceutical company developing proprietary Lm-LLO immunotherapies for the treatment of cancer. Free Update Download >>


We recently attended the American Society of Clinical Oncology (ASCO) meeting in Chicago, and clinicians we spoke with were quite impressed with what Advaxis’ technology can offer cancer patients as a potentially safe and effective immunotherapy. Meanwhile, Advaxis released data demonstrating a continued strong survival benefit in patients with cervical cancer, a disease in which current therapies have poor efficacy and are highly toxic. In our view, the momentum in Advaxis is warranted, and the company’s recent Business Update conference call affirms that management is executing on its business plan. Please See Key Disclosures and Disclaimers >>

Opportunity Highlights

Survival results presented at ASCO are impressive and continue to validate ADXS-HPV’s safety and efficacy. The landmark Gynecologic Oncology Group (GOG) study demonstrated that typical chemotherapy (cisplatin + paclitaxel) offers cervical cancer patients a 20% chance of survival for 18 months. Advaxis’ lead drug candidate, ADXS-HPV, recently demonstrated a 22% chance for 18-month survival and an 18% chance for 24-month survival with just one cycle of therapy in a Phase II study. Additionally, ADXS-HPV is significantly less toxic vs. chemotherapy, and multiple doses in future trials could mean even better efficacy for the drug. ADXS-HPV is headed for Phase III trials later this year, with FDA recently granting an end-of-Phase II meeting for the company.

J&J deal with Aduro Biotech suggests additional upside for Advaxis. On May 29th, privately held Aduro BioTech announced a deal with J&J worth up to $365M in up-front fees and milestone payments, plus royalties on future product sales. J&J will develop prostate cancer treatments using Aduro’s Lysteria-based immunotherapy platform, and will assume all development and marketing costs. Aduro and Advaxis are the only two companies developing Lysteria monocytogenes (Lm)-based cancer treatments, of which we’re aware, and Advaxis’ platform technology appears superior based on our analysis (see next page). We note that the J&J/Aduro deal is only for one cancer type, and the large price tag is an indication that Advaxis may be undervalued given its potentially superior technology, opportunities for multiple treatments in several cancers, and royalties on its animal health products with partner, Aratana (NASDAQ: PETX).

Several catalysts expected to bring visibility to Advaxis. Advancement of the company’s animal health partnership with Aratana, a meeting with FDA on the Phase III ADXS-HPV program later this year, and a potential deal with a major pharmaceutical company combining Advaxis’ immunotherapy platform and a PD-1 inhibitor, are key potential catalysts this year, in our view, that could create value for Advaxis.

Our valuation estimates are based on assumptions that may or may not be correct. The achievement of our share price objective is subject to risks and may not be achieved. Some of these risks are outlined in the Investment Risk section of the downloadable report.