13 Oct

Biopharma Co. Partners With Merck for Combo Drug Trial

October 13, 2022

Source: Dr. Joseph Pantginis  (10/12/22)

With this and other clinical studies, the U.S. company has a busy and, thus, catalyst-rich Q4/22 ahead, noted an H.C. Wainwright & Co. report.

Compass Therapeutics Inc. (CMPX:NASDAQ) entered a partnership with Merck & Co. Inc. (MRK:NYSE) to conduct a clinical trial evaluating the combination treatment of Compass’ CTX-471 plus Merck’s Keytruda in a subpopulation of patients with certain metastatic or locally advanced cancers, reported H.C. Wainwright & Co. analyst Dr. Joseph Pantginis in an October 11, 2022 research note. CTX-471 is a monoclonal antibody targeting CD137.

“Phase 1b is an important signal-seeking study,” Pantginis wrote.

Also of note, the Massachusetts-based biopharma offers investors significant potential return, as indicated by its current share price of US$3.11 and H.C. Wainwright’s target price on the company of US$12 per share.

Participants in the Phase 1b collaboration study will be patients with non-small cell lung cancer, small cell lung cancer, melanoma, or squamous cell carcinoma of the head and neck who progressed after receiving checkpoint inhibitor therapy. In the trial, after a patient progresses, they will be given CTX-471 plus Keytruda. Part one of the study will test escalating doses of CTX-471 and a fixed Keytruda dose. Part two will test expanding doses.

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Also of note, the Massachusetts-based biopharma offers investors significant potential return, as indicated by its current share price of US$3.11 and H.C. Wainwright’s target price on the company of US$12 per share.

Pantginis pointed out that Merck and other big pharmaceutical firms are now highly selective when collaborating regarding their checkpoint inhibitors. Merck having agreed to join forces with Compass, suggests “the combination approach must make mechanistic sense, and we believe combining CTX-471 and Keytruda fits the bill.”

Other Plans for Pipeline

In addition to this Phase 1b, Compass intends to conduct two additional CTX-471 studies. One is a post-cyclin-dependent kinase inhibitor salvage study, Pantginis relayed. The other will test induction therapy of carboplatin/etoposide/atezolizumab followed by maintenance atezolizumab plus/minus CTX-471 as a first-line treatment for small cell lung cancer patients.

Near-Term Catalysts

Compass is busy this quarter with several “meaningful milestones lined up, noted Pantginis. The “leading value driver” for the biopharma, according to Pantginis, is the start of a Phase 2/3 study in the U.S. of CTX-009 in biliary tract cancer.

Other potential stock-moving events are the start of a Phase 2 study of CTX-009 in advanced colorectal cancer and the completion of Phase 1b CTX-471 monotherapy study in various cancers. Finally, Compass is targeting Q4/22 for submitting an investigational new drug application for CTX-8371.

H.C. Wainwright has a Buy rating on Compass.

“Our focus is squarely on Compass’ clinical data delivered by CTX-009, to date, as well as its strong cash balance to weather these depressing markets,” Pantginis wrote.

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Disclosures For H.C.Wainwright & Co., Compass Therapeutics Inc., October 11, 2022

H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer.

I, Joseph Pantginis, Ph.D. , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.

None of the research analysts or the research analyst’s household has a financial interest in the securities of Compass Therapeutics, Inc. (including, without limitation, any option, right, warrant, future, long or short position). As of September 30, 2022 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Compass Therapeutics, Inc..

Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report. The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.

The firm or its affiliates received compensation from Compass Therapeutics, Inc. for non-investment banking services in the previous 12 months. The Firm or its affiliates did receive compensation from Compass Therapeutics, Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.

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Pantginis pointed out that Merck and other big pharmaceutical firms are now highly selective when collaborating regarding their checkpoint inhibitors. Merck having agreed to join forces with Compass, suggests “the combination approach must make mechanistic sense, and we believe combining CTX-471 and Keytruda fits the bill.”


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