TScan Therapeutics (NASDAQ:TCRX) has been able to report positive results from its phase 1 multi-arm study for the treatment of patients with several types of hematological malignancies such as acute myeloid leukemia [AML], myelodysplastic syndrome [MDS] and Acute Lymphocytic Leukemia [ALL]. It did so with the use of two T-cell receptor therapy [TCR-T] candidates TSC-100 and TSC-101, which are being developed to increase the chance of success of hematopoietic cell transplantation [HCT] for all these hematological patient populations. That is, to reduce to treat residual disease and to prevent relapses from occurring as well. Initial phase 1 data released showed that both of these TCR-T candidates, along with HCT, were able to prevent relapse in 6 patients with at least 4-months of follow-up.
Whereas, the 3 out of the 4 placebo patients didn’t fare well with their transplantation. Why I believe that this biotech might offer some value for investors to look into is because updated data from this phase 1 multi-arm study is going to be released in 2024. Not only that, but this biotech is also advancing several solid tumor candidates known as T-Plex. T-plex will be a multiplexed type of treatment being advanced with the combination of two to three different TCR-Ts. The combination of these TCR-Ts will allow it to target different tumor antigens on different HLA solid tumor types. The end game goal is to overcome resistance and the heterogeneous nature of solid tumors. Initial data from T-plex and other related therapies will be released in 2024.
TSC-100 and TSC-101 Could Help HCT Patients Immensely
The thing is that TSC-100 and TSC-101 hold the potential to help a lot of patients with several different types of hematological malignancies such as Acute Myeloid Leukemia [AML], Myelodysplastic Syndrome [MDS] and Acute Lymphocytic Leukemia [ALL]. How so? It will do so by reducing residual disease and preventing relapse in these patient populations. The thing is that Hematopoietic cell transplantation [HCT] remains standard of care [SOC] for these patients. A major problem with this is that roughly 60% of patients who receive this type of SOC treatment are cured. Sadly, the other 40% of patients are left with hardly any effective treatment options. Especially, since the other patients who relapse, are left with poor treatment outcomes. This is where TSC-100 and TSC-101 kick in, which is that they are designed to target HA1 and HA2 respectively in HLA-A0201 positive patients. As I stated above, the goal of these therapies is to reduce minimal residual disease [MRD] and relapse rates that would typically occur for these patients. In essence, to increase the odds of success after an HCT has been done.
In order to see if either TSC-100 and/or TSC-101 are successful, TScan Therapeutics has been able to initiate a multi-arm phase 1 study targeting A*02:01 positive patients. In the United States alone, there are 42% of these patients with this type of HLA type. Whereas, 58% of these patients are A*02:01 negative. For the patients who are negative for this HLA type, they have to receive SOC HCT. However, the other patients are given either TSC-100 or TSC-101 depending upon what other subtype they match. That is, out of the 42% patients who are A*02:01 positive, they are further classified into other subtypes of AML, MDS, and ALL such as:
- HA-1 positive – 60%
- HA-2 positive – 40%
Not only has such an early-stage study been initiated, but initial positive results suggest that both of these candidates are active in being able to reduce residual disease and prevent relapse in patients. The final outcome is to improve the odds of success of an HCT for AML, MDS, and ALL patients. This was proven with the release of positive initial data for these patients, from the ongoing phase 1 multi-arm study in a poster presentation, at the 65th American Society of Hematology [ASH] Annual Meeting and Exposition. Both aspects of efficacy outcomes can be explained with the release of data from this poster:
- 6 out of 6 patients in the treatment arm had complete elimination of target cells – This indicates the improvement of reduced minimum residual disease described above
- No relapses occurring in the 6 patients in the treatment arm – 4 patients with a follow-up of past 6 months
With respect to no relapses occurring, it could be because of the complete donor chimerism that took place. With cell engraftment occurring successfully, this complete donor chimerism [all donor cells remaining in place], improves the odds of success of the HCT. If somehow these patients given these TCR-T candidates were shown to have ended up with mixed chimerism, then their odds of relapsing after HCT would be very high. Why I believe that there is an opportunity here for shareholders would be that there will be the release of relapsed data from this phase 1 study using TSC-100/TSC-101, in 2024. This trial is continuing to enroll and updated data is going to include a lot more patients than what was just released. The current data released had 6 patients in the treatment arm and then 4 patients in the placebo arm.
According to the 10-Q SEC Filing, TScan Therapeutics had cash, cash equivalents, and marketable securities of $215.4 million as of September 30th 2023. This biotech is definitely not at risk of any type of near-term cash raise. The reason why is because the guidance given by the company is that it expects to have enough cash to fund its operations into 2026. A big reason for the cash on hand is because of an underwritten public offering of common stock and pre-funded warrants. Total gross proceeds received from this offering was $134.7 million after deducting expenses. It is fine for now, but it does have an option if the need arises to eventually raise additional cash. On May 16, 2023, it entered into an agreement with Wedbush Securities, Inc. to be able to sell up to an aggregate of $75 million worth of shares of its common stock from time to time. No common stock has been sold under this Sales Agreement to date.
Risks To Business
There are several risks that investors should be aware of before investing in TScan Therapeutics. The first risk to consider would be with respect to the release of relapse data from the phase 1 multi-arm study, which is using TSC-100/TSC-101 for the treatment of HLA A*02:01 positive patients. While initial data with a smaller group of patients was able to have a highly effective outcome, there is no assurance that the addition of new patients will yield an equivalent or superior clinical outcome.
A second risk to consider would be with respect to the solid tumor program in place. It expects to report initial multiplexed therapy data for the combinations of its TCR-Ts known as T-Plex, along with other relevant data as part of this program targeting solid tumors. Once this data is released, there is no guarantee it will turn out to be positive. In terms of what is needed for this solid tumor program to prove itself would be reduced resistance. That’s because solid tumors are heterogeneous, which means variable antigen expression levels. Thus, a lot of these tumors end up not being treated properly because tumor cells are able to counter T-cells attacks. This phenomenon is a result of HLA gene losses occurring in up to 40% of solid tumors. This means success for T-Plex with multiple TCR-Ts would look like the ability to remove HLA gene loss.
The third and final risk to consider would be the Amgen (AMGN) partnership that it was able to establish. The goal of this partnership was to have a multi-year collaboration agreement for the use of TScan’s TargetScan technology to develop CD4+ T cell candidates capable of being able to treat patients with Crohn’s Disease. There is even an option to expand this collaboration agreement to include another target indication of Ulcerative Colitis. With respect to this agreement, it received a $30 million upfront payment and then has the potential to earn up to $500 million in development and commercial milestone payments. Along with the Tiered royalties that would typically be made under such deals. The problem here is that a lot of the milestone payments are tied to positive data being generated in the clinic. There is no assurance that positive data will be achieved for starters. Not only that but there is no way of knowing whether or not Amgen will stay on board as a partner for this collaboration.
Things are going well for TScan Therapeutics since it has been able to achieve positive results from its ongoing phase 1 multi-arm study, using TSC-100/TSC-101 to treat HLA A*02:01 positive AML, MDS, and ALL patients. There is something else to consider here in that this biotech is trying to separate itself from other TCR-T companies in that it is targeting multiple HLA types. The significance of this is that it could increase the percentage of the patient population it is targeting. For example, it is working on targeting the top 6 to 8 HLA types in solid tumors.
If ultimately successful, this would allow it to target up to 90% of the patients in the United States. On the other hand, other TCR-T biotechs are only targeting one HLA type for a solid tumor. This limits their ability to target a larger portion of the patient population. That is, there is only the targeting of one HLA, which means the ability to only target 40% of a specific tumor patient population. With respect to the T-plex program that remains to be seen, but the ultimate goal is to be able to remove HLA gene loss that occurs for such patients. With two data readouts in 2024, plus the advancement of a TCR-T program targeting Crohn’s Disease with Amgen, I believe that investors might be able to benefit from any potential gains made.