Werewolf Therapeutics: This Canine May Nonetheless Hunt (NASDAQ:HOWL)

“A person would possibly befriend a wolf, even break a wolf, however no man may really tame a wolf.”― George R.R. Martin, A Dance with Dragons

In the present day, we take our first have a look at a small biotech identify with a memorable ticker image. The inventory at present trades at money worth and has an intriguing growth strategy that might have long run potential. An evaluation follows under

Firm Overview:

Werewolf Therapeutics, Inc. (NASDAQ:HOWL) is a Watertown, Massachusetts primarily based early-stage biopharmaceutical concern centered on the event of conditionally activated immunotherapies for the therapy of most cancers. The corporate at present has two applications starting Section 1 trials and one other preclinical asset out-licensed to Jazz Prescribed drugs (JAZZ). Werewolf was shaped in 2017 and went public in April 2021, elevating web proceeds of $109.2 million at $16 a share. Its inventory trades slightly below $3.50 a share, translating to a market cap of roughly $115 million.

Predator Platform

Though immunotherapies have positively impacted many sufferers’ lives, their systemic supply may end up in not sufficient cytokine delivered to most cancers cells and an excessive amount of to off-target organs, leading to each therapy inefficacy and wholesome tissue degradation by way of assault from the physique’s personal immune system. The corporate’s resolution to those points is its Predator platform, which generates ‘Indukine’ molecules that focus on the tumor microenvironment [TME]. Every remedy is comprised of 4 parts: a cytokine – up to now, both interleukin or interferon; an inactivation area, which is designed to restrict off-target toxicity by blocking the cytokine from binding exterior the TME; a half-life extension area that overcomes the quick half-lives of cytokines in vivo and detaches as soon as the cytokine is within the TME; and a protease-cleavable linker that’s designed to sever solely when contained in the TME, enabling conditional activation. Up to now, Predator has spawned two scientific belongings and a 3rd that has resulted in an out-licensing deal.

Pipeline:

WTX-124. Werewolf’s lead program is WTX-124, a systemically delivered, conditionally activated Indukine model of Interleukin-2 (IL-2) that’s present process analysis in a Section 1/1b trial as each a monotherapy and together with Merck’s (MRK) anti-PD-1 remedy Keytruda (pembrolizumab) in sufferers with superior or metastatic strong tumors. After demonstrating conditional activation and tumor elimination in murine fashions within the preclinic, Werewolf dosed its first human affected person in 3Q22. The dose escalation research will enroll ~150 sufferers with renal cell carcinoma, superior or metastatic cutaneous malignant melanoma, or different strong tumors and have exhausted all normal of care (SOC) choices or for which no SOC exists. WTX-124 will likely be assessed for security, pharmacokinetics, efficacy, and really helpful dose for growth, in addition to a biomarker analyses to find out proof of mechanism and conditional activation. Preliminary information are anticipated in 4Q23.

WTX-124 is meant to enhance on Proleukin (aldesleukin), a recombinant IL-2-like protein that was accredited practically 30 years in the past for the therapy of renal cell carcinoma and melanoma that’s bedeviled by antagonistic occasions resembling immunosuppression and vascular leak, which manifests within the aforementioned off-site toxicity.

Werewolf just isn’t the one biotech making an attempt to engineer an improved IL-2 cytokine for most cancers therapy. In truth, it’s one among roughly one dozen considerations with scientific or preclinical applications making an attempt to unravel the off-site toxicity subject for this specific cytokine. That stated, enhanced IL-2 has been a graveyard for the trade not too long ago, with notable failures from Nektar Therapeutics (NKTR), Moderna (MRNA), and Sanofi (SNY).

WTX-330. The corporate’s different clinically cleared program is WTX-330, which is a systemically delivered, conditionally activated Indukine model on Interleukin-12 (IL-12). After its compound demonstrated success towards checkpoint inhibitor refractory tumors in mice, Werewolf is at present within the technique of activating websites for a Section 1 research that may assess the security and tolerability of WTX-330 monotherapy in ~75 sufferers with superior or metastatic tumors who’re both immunotherapy resistant or unresponsive.

There are not any accredited IL-12 therapies; nonetheless, there are 9 different IL-12 cytokine preclinical or scientific applications in course of.

WTX-613. Though devoid of any human trial information concerning its novel bioengineering strategy to treating most cancers, Werewolf has already inked a doubtlessly significant out-licensing take care of Jazz. In return for the worldwide growth and industrial rights to Indukine interferon alpha asset WTX-613 (now often known as JZP898), Jazz shelled out $15 million upfront and agreed to pay for its preclinical growth. As soon as via preclinical analysis, Jazz will take over from there, answerable for the IND submitting and all scientific growth henceforth. Along with the upfront cost and reimbursement of preclinical bills, Werewolf is eligible to obtain $520 million in developmental and regulatory milestones, $740 million in industrial milestones, and mid-single digit royalties.

Share Value Efficiency

That stated, Werewolf is one other instance of a biotech with an attractive but untested (in people) strategy to treating illness that flounders after it goes public – not resulting from any failings of its therapies, however fairly as a result of there are not any near-term scientific catalysts over which the market can get excited. As such, with its lead asset simply coming into the clinic 16 months after going public, shares of HOWL have fallen sharply from their IPO pricing. That stated, they’ve rallied strongly off their all-time low of $1.39 set on December seventh, 2022.

Stability Sheet & Analyst Commentary:

To fund its scientific endeavors, the corporate held money of $140.5 million, that when mixed with entry to an undrawn $40 million time period mortgage, ought to present it a money runway into 2Q24. This operational funding projection doesn’t take into account both further milestone funds from Jazz or Werewolf’s $50 million ATM facility, below which it has $35.6 million remaining.

Regardless of Werewolf inventory’s dismal efficiency, Road analysts are unanimously bullish on its prospects, that includes one outperform and 5 purchase rankings, though 4 of the prognosticators have not offered any commentary in over a 12 months – unsurprising, contemplating the dearth of occasions on which to remark. EF Hutton did provoke protection with a purchase ranking and an $8.30 worth goal in December 2022, whereas HC Wainwright reassumed protection in June 2022 with a purchase ranking and a $20 worth goal. EF Hutton reissued that ranking final week.

Additionally bullish is RA Capital Administration. Represented on the board by Derek DiRocco, the helpful proprietor added 1,853,000 shares at $2.21 on January 6, 2023, elevating its possession curiosity to 18%.

Verdict:

Save an IND submitting by Jazz for JZP898 – the FDA acceptance of which might possible set off a small regulatory milestone cost – there’s nothing for Werewolf to supply would-be buyers by way of catalysts till its 4Q23 information readout for WTX-124. Nevertheless, buying and selling at present money worth, there’s restricted draw back danger till the information launch. For these affected person sufficient to barter the illiquidity in its choices, Werewolf provides a strong coated name alternative. It is usually a reputation that appears worthy of small ‘watch merchandise’ holding that ought to accumulating throughout dips available in the market for aggressive buyers inside a well-diversified biotech portfolio.

“Throw me to the wolves and I will return main the pack”― -Unknown