In my opinion, it’s not useless speculation at all. To put it bluntly, you want the financing issue to be resolved, after which you will examine the market price at that stage in relation to research data. In addition, you seem to have a certain number of things you want answered regarding the research. Every investor has their own subjective risk tolerance (and possible investment strategy) on which these decisions are based.
In Faron’s case, I am able to take this financing risk according to my own strategy. Behind this risk decision are several variables:
- The research results support Bex’s alleged mechanism (more on this later)
- If this mechanism works, it is a very significant scientific discovery (more on this later as well)
- JJ has stated that partnership models have been available in the past, but the compensation has not been sufficient, meaning there is interest (of course, here one must trust JJ’s words, as NDAs probably prevent all more detailed information about those past matters)
- An investment bank is involved, which genuinely matters so that JJ and partners don’t have to handle deal matters alone
- Based on point 2, I believe this would genuinely arouse interest due to its potential among potential partner candidates, and also, they wouldn’t necessarily want to give this to a competitor.
So, in my own risk analysis, this partnership model is just a matter of time. One of Clark’s concerns is whether this future deal will be good enough, whether the potential can be realized, and whether research can be advanced as soon as possible with fixed and other costs. Faron has quite clearly stated that this is what they are aiming for. Especially in the latest Karon Grill, JJ concretely presented Faron’s views. I wouldn’t be surprised if blood cancers are used to secure Faron’s financing for other research candidates. Even at the cost that Faron would receive a smaller share of drug sales from blood cancers if successful. In my own analysis, the biggest risk here is that a partner candidate is not satisfied with just blood cancers, but also wants a piece of, for example, solid tumors with their financing, and in this case, the partner’s and Faron’s views on valuations would not meet. I still guess that negotiations are ongoing with several candidates, so the partner, despite Faron’s financial situation, does not have all the power to dictate the terms of a possible agreement unilaterally. After all, a competitor could take the deal for themselves.
Nor would I be concerned about proceeding only with blood cancers at this stage, as in my opinion, Faron’s public statements (press releases, articles, Yle’s morning event led by Maija and a HUS colleague, etc.) very strongly suggest that efforts are now being made to spread awareness widely and to get patients for future research from as large a pool as possible, in order to select Clever-1 expressing patient candidates as well as possible.
All this is based on Faron’s hypothesis about Bex being correct. Every investor should familiarize themselves with this as well as they can. My understanding is as follows: Some macrophages are M2-type, which are immunosuppressive, meaning, simply put, good from the cancer’s perspective because they don’t get caught by the immune system as easily, thus enabling a better growth environment for cancer. These are particularly present in the blood cancers studied by Faron, but also in other cancer types.
In these M2-type (i.e., immunosuppressive) macrophages, Clever-1 protein has been observed in several studies. It also appears that this is a very important part of the entire M2 macrophage phenotype. Faron’s mechanism of action seems to specifically target this Clever-1 protein in macrophages, i.e., those found in these immunosuppressive macrophages (M2), which are better at evading the body’s defense mechanisms. And it has also been observed that precisely Clever-1 affects why the M2 phenotype is immunosuppressive.
The results obtained from studies (BEXMAB and MATINS) indicate that Bex as a drug is capable of affecting precisely this Clever-1 mechanism. That is, Bex binds to the Clever-1 receptor, which is on the surface of M2 macrophages. With this binding, the macrophage’s Clever-1 does not function, and thus is not as immunosuppressive as it would be if Clever-1 were not blocked. As a reminder, this means that the T-cells doing the destruction work better detect the tumor when it is not in an immunosuppressive state.
Scientifically, this is/would be a very significant finding. Cancer formation is such a complex equation that this could be one term achieved in solving the equation. T-cells have their own role in the overall picture, and are the primary treatment. But what if primary treatments only kill 99.9999% of the tumor, and one cancer cell remains that managed to avoid being killed because it contained the immunosuppressive macrophage phenotype M2 with Clever-1 protein? And this starts to spread? It is observed that the tumor returned after x years, and no longer responds to T-cell treatments because it now contains a lot of this immunosuppression. With a good safety profile, Bex could be used in all cancer treatments, for example, if one wants to ensure at the end of treatment that not a single cancer cell remains that could divide and return as a tumor.
If you want to understand the immune system and cancer tumors, I recommend Kurzgesagt’s video ‘The Reason Why Cancer is so Hard to Beat’. It explains simply but well why cancer can form at all, and why it can also develop/mutate. This basic understanding is required to better grasp how TAMs work, what M1 and M2 macrophage phenotypes mean, why Clever-1 refers to immunosuppression, and how through it this cancer hiding mechanism can (possibly) be solved - at least partially.
Personally, I don’t see any more risks here than in other drug candidates at a similar stage. Rather the opposite.