Affimed N.V. (NASDAQ: AFMD) is a clinical-stage biopharmaceutical company, focused on cancer immunotherapies. Its lead candidate is AFM13, a natural killer cell (NK-cell) TandAb, which is in a Phase 2a clinical study.
The company shares jumped 200% before noon (EST) in Monday’s trading session, with unusually high trading volume of 18 million shares. The share activity came on the heels of a new development agreement with Genentech.
On August 27, 2018 – Affimed announced that it has entered into a strategic collaboration agreement with Genentech, a member of the Roche Group, to develop and commercialize novel NK cell engager-based immunotherapeutics to treat multiple cancers. Affimed will apply its proprietary Redirected Optimized Cell Killing (ROCK®) platform, which enables the generation of both NK cell and T cell-engaging antibodies, to discover and advance innate immune cell engager-based immunotherapeutics of interest to Genentech.
Under the terms of the agreement, Affimed will receive $96 million in an initial upfront payment and other near-term committed funding. Affimed may be eligible to receive up to an additional $5.0 billion over time, including payments upon achievement of specified development, regulatory and commercial milestones, and royalties on sales.
Affimed’s proprietary, versatile and modular ROCK® (Redirected Optimized Cell Killing) platform enables the generation of first-in-class, tetravalent, multi-specific immune cell engagers. Based on its modularity, ROCK® allows for antibody engineering of highly customizable NK and T cell engagers to generate clinical candidates tailored to multiple disease indications and settings, including generation of molecules against validated oncology targets to address the limitations of existing treatments of hematologic and solid tumors.
Its lead candidate is AFM13, a natural killer cell (NK-cell) TandAb, which is in Phase 2a clinical study of relapsed CD30-positive lymphoma and Phase 1b clinical study of anti-PD-1 antibody Keytruda (pembrolizumab) in patients with relapsed Hodgkin lymphoma. The company’s products include AFM24, a NK-cell bispecific antibody targets EGFR-wild type represents a validated antigen expressed by various solid tumors; AFM26, which binds to B cell maturation antigen (BCMA) for the treatment of multiple myeloma; and Trispecific Abs for the treatment of multiple myeloma. Its products also comprise AFM11, a T cell TandAb, which is in Phase 1 clinical trial in patients with relapsed CD19+ B cell malignancies, including non-Hodgkin Lymphoma and acute lymphocytic leukemia (AML); and AMV564, a CD33/CD3-specific T-cell TandAb is in Phase 1 clinical study of refractory AML. The company has license agreements with Amphivena Therapeutics, Inc., Deutsches Krebsforschungszentrum, and Xoma Ireland Limited; research funding agreement with The Leukemia & Lymphoma Society; and collaboration with Merck Sharp & Dohme B.V. It also has a clinical development and commercialization collaboration with The University of Texas MD Anderson Cancer Center to evaluate AFM13 in combination with MD Anderson’s NK-cell product.
3 Wall Street analysts have issued ratings and price targets for Affimed in the last 12 months. Their average twelve-month price target is $5.00, suggesting that the stock has a possible upside of 9.89%. The high price target for AFMD is $5.00 and the low-price target for AFMD is $5.00. There are currently 1 hold rating and 2 buy ratings for the stock, resulting in a consensus rating of “Buy.”
8/28/2018 Jefferies Financial Group Upgrade Hold ➝ Buy
8/28/2018 BMO Capital Markets Boost Price Target Outperform $4.00-$5.00
11/24/2017 Oppenheimer Reiterated Rating Hold
Financial review Q2 2018
Cash and cash equivalents totaled €47.4 million as of June 30, 2018 compared to €39.8 million as of December 31, 2017. The increase was primarily attributable to the net proceeds of €19.7 million from the public offering in February 2018, partially offset by Affimed’s operational expenses.
Net cash used in operating activities was €15.2 million for the six months ended June 30, 2018 compared to €13.1 million for the six months ended June 30, 2017. The increase was primarily related to higher cash expenditure for research and development (R&D) in connection with Affimed’s clinical development programs.
Revenue for the second quarter of 2018 was €0.2 million compared to €0.5 million for the second quarter of 2017. Revenue in the 2018 period was solely derived from AbCheck services while revenue in the 2017 period relates to Affimed’s former collaboration with Amphivena and AbCheck services.
R&D expenses for the second quarter of 2018 were €7.1 million compared to €5.4 million for the second quarter of 2017. The increase was primarily related to higher expenses for AFM13 and AFM11.
G&A expenses for the second quarter of 2018 were slightly higher at €2.2 million compared to €2.0 million for the second quarter of 2017.
Net loss for the second quarter of 2018 was nearly unchanged at €8.0 million, or €0.13 per common share, compared to a net loss of €7.9 million, or €0.18 per common share, for the second quarter of 2017. The increase in operating expenses was offset by finance income of €1.1 million in the second quarter of 2018, whereas finance costs of €1.2 million were shown in the second quarter of 2017.
Stock influences and risk factors
Further developments and payments under the Genentech agreement could be a catalyst for the company’s shares;
Drug development is expensive, time consuming and uncertain, and they may ultimately not be able to obtain regulatory approvals for the commercialization of some or all of their product candidates;
They compete with approved therapies and investigational therapies for patients for clinical studies. If they are unable to enroll patients in clinical studies, their research and development efforts could be materially adversely affected;
They may have no marketing, sales or distribution infrastructure. If they are unable to develop sales, marketing and distribution capabilities, or if they fail to achieve adequate pricing and/or reimbursement they will not be successful in commercializing product candidates.
On Monday, August 28, 2018, AFMD shares were at $5.15 (+221.88%) on traded volume of 21.8 million shares. The current RSI(14) is 93.52
At $5.15 AFMD shares are trading above their 50 DMA and 200 DMA of $1.77 and $1.90 respectively.
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