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This morning, MabVax Therapeutics (NASDAQ: MBVX) closed a public offering of $4.1 million in cash. The company offered 1.343 million shares. The offering took place at $1.75 per share. Both OPKO Health, Inc. (NYSE: OPK) and Dr. Phillip Frost, CEO and Chairman of OPKO Health, Inc. participated in the offering. Earlier in May, the company sold the equivalent of 0.486 million shares to certain investors to raise $850,000 in capital. In total, MabVax brought in just shy of $5 million in gross proceeds over the past week. I expect the company to use this new cash to aggressively advance its clinical pipeline.

As noted in the past, I'm particularly optimistic about MVT-1075. A Phase 1 clinical study with MVT-1075 is listed on ClinicalTrials.gov as active, but not yet recruiting (NCT03118349). Below is a quick review of MVT-1075 and what to expect from MabVax over the next few months.

Quick Background

MabVax's proprietary monoclonal antibody (mAb) product candidates are designed to elicit an immune response to highly specific antigens found almost exclusively on cancer cells. The company’s lead antibody candidate, HuMab-5B1, targets CA19-9 positive tumors.

The initial focus is on pancreatic cancer, a logical approach because CA19-9 is the most frequently utilized and only validated serum market for assessment of pancreatic cancers. The CA19-9 antigen facilitates tumor proliferation, invasion, and metastatic spread (1). High serum levels correlate with poor prognosis (2). Importantly, it is found in up to 92% of pancreatic ductal adenocarcinomas (3) and is present in high copy number on cancer cells (4), thus making it an attractive molecular target.

The company is taking advantage of HuMab-5B1's high specificity and minimal off-target binding to develop the drug via multiple pathways: as a therapeutic (MVT-5873), a PET-imaging agent (MVT-2163), and a radioimmunotherapy (MVT-1075) for patients with pancreatic cancer.

It is MVT-1075 that has piqued my interest. In fact, I am tremendously excited about the potential for MVT-1075. This is because the preclinical data looks excellent, the reproducibility and manufacturing process are commercially viable, and the market opportunity is tremendous.

Why I'm Optimistic About MVT-1075

Phase 1 clinical data with MVT-5873 demonstrates the backbone HuMab-5B1 antibody to be safe and have a favorable pharmacokinetic profile at therapeutic dose levels. Importantly, biomarker data demonstrate that doses of 1 mg/kg MVT-5873 appear to normalize elevated levels of circulating CA19-9 in approximately 50% of patients and doses of 2 mg/kg appear to completely normalize levels of CA19-9 100% of patients.

As of March 2017, MabVax enrolled 25 patients into the MVT-5873 Phase 1 study, with 5 subjects demonstrating stable disease after 4 cycles (2 RECIST assessments) and 3 subjects demonstrating stable disease after 3 RECIST assessments. These are encouraging data for patients with stage 3/4 pancreatic cancer. Management is preparing for a second Phase 1 trial with MVT-5873 to be used as a first-line therapy combined with Celgene's Abraxane®. This would allow for a significant expansion of the target patient population from the current Phase 1 studies in stage 2/3 PDAC subjects.

MVT-2163 is a PET imaging agent that combines the HuMab-5B1 antibody (MVT-5873) with radioactive 89ZR DFO. Preclinical work with MVT-2163 was supported by a $1.75 million NIH grant. Initial Phase 1 data show MVT-2163 offers highly specific targeting on the tumor sites with minimal off-targeting binding. This is consistent with preclinical data showing high congregation of the drug on the tumor site with low levels in the blood or non-target organs.

This not only validates the concept for MabVax but provides a strong rationale for advancing MVT-1075 into clinical studies. Data so far show a high correlation with FDG-PET standard, with MVT-2163 potentially able to identify smaller nodes that a CT scan might miss. This could prove important when staging patients for surgery or assessing the effectiveness of various treatment options. Management plans to initiate an expansion cohort in newly diagnosed pancreatic cancer patients prior to surgery in the next few months.

As noted above, the strong initial data with MVT-2163 provide excellent proof-of-concept validation for MVT-1075. MVT-1075 preclinical data is nothing short of fantastic. At AACR in April 2017, company scientists presented a poster showing strong preclinical pharmacology, efficacy, and safety. Similar to the results with MVT-2163, biodistribution data support the company's hypothesis that MVT-1075 targets CA19-9 on the tumor cells with minimal off-target (off-organ) binding. Quite simply, this makes it an ideal therapeutic candidate for difficult to treat, non-resectable cancer.

More importantly, the efficacy data is very impressive. Escalating doses of MVT-1075 given as a single administration to athymic nude mice with established BxPc3 xenografts show the drug to be well tolerated with effective and sustained tumor growth inhibition throughout the observed period (Day 1 through 57). The graph below shows the normalized tumor volume for increasing doses of MVT-1075 (75, 150, 300, and 450 μCi) compared to MVT-5873 (naked antibody) and a saline control. Not only is there outstanding linear dose-response, but the highest dose of MVT-1075 (450 μCi) looks to have completely obliterated the tumor!

Additional data from athymic nude mice with established orthotopic BxPc3-Luc tumors show that MVT-1075 significantly inhibited tumor growth compared to a saline control. MVT-1075 treated group regressed to approximately 50% of the pre-treatment volume by day 20 vs. a mean tumor volume increase of approximately 300% for the saline control.

For the planned Phase 1 clinical trial, MabVax will administer MVT-1075 on a fractionated dose schedule. This may permit delivery of a higher total dose of MVT-1075 while maintaining acceptable tolerability levels.

The MVT-1075 Phase 1 Study

With cash in hand, MabVax can now initiate the all-important MVT-1075 Phase 1 study. The company plans to evaluate the safety, dosimetry, and pharmacokinetics of MVT-1075 in an open-label, non-randomized, dose-escalation design. Patients enrolled in the study will have been diagnosed with recurrent locally advanced or metastatic (ECOG 0 or 1) pancreatic ductal adenocarcinoma (PDAC) or other CA19-9 positive malignancies. Patient disease status will be evaluated based on tumor measurements using RECIST 1.1 criteria. MabVax will use a blocking dose of MVT-5873 to reduce circulating levels of CA19-9 in the blood and increase the concentration of MVT-1075 on the tumor site.

The first investigative site has been announced at Memorial Sloan Kettering Cancer Center in New York City. HonorHealth Research Institute in Scottsdale, Arizona, is the second site on board. IRB approval is currently being sought and enrollment is expected to begin in the second quarter 2017. I'm hopeful we see initial data before the end of 2017. The company has separately secured a third party cGMP manufacturer for MVT-1075 for clinical studies.

Conclusion

I think MabVax shares offer investors an incredible opportunity. I really like the platform and the data so far look very good. There are numerous data read-outs and updates expected over the next several months and MSKCC continues to be an excellent clinical investigator for the company. Dr. Phillip Frost and OPKO Health continue to be long-term investors in the story. I'm happy to see the company secure the necessary cash to advance the pipeline forward over the next 6-12 months. I think the market was largely ignoring MabVax prior to the financing because of the lack of visibility on moving forward with MVT-1075. The stock is tremendously undervalued at this level.