This note is a follow-up on our note from two days ago, containing our valuation assumptions for the new planned trial in the US (n= up to 40) of nadunolimab in haematological cancers, which is sponsored by an external investigator.

Acute myeloid leukaemia (AML) is a type of blood cancer that originates from immature white blood cells in the bone marrow. It usually afflicts older persons (above 60). The disease progresses rapidly; the 5-year survival rate is around 30% (cancer.net). There is a large difference in survival between younger more fit patients who can tolerate chemotherapy and older who cannot. Standard treatment of AML in healthy and younger patients consists of high-dose chemotherapy, often complemented with directed therapies and sometimes with a stem-cell transplant. Such patients are often cured. This is not the case with older patients who have a short, expected survival. This is probably the population in which nadunolimab will be tested.

Nadunolimab will be combined with azacytidine and the targeted therapy drug venetoclax in refractory patients. Venetoclax (VEN) belongs to the BH3-mimetic class that selectively targets BCL-2, activating apoptosis (cell death). Azacytidine is a chemical analogue of cytidine, a nucleoside (one of the four nucleobases that make up DNA), with a dual mode of action – at lower doses it hypomethylates DNA (which modifies gene expression) while at higher doses it integrates into DNA making it unstable leading to cell death. The combination was recently studied (in VIALE-A, DiNardo et al. 2020) and approved in older patients ineligible for chemotherapy in the first line, where it performed better than azacytidine alone (median OS of 14.7 versus 9.6) and is now a preferred choice. It is used off-label in certain countries in the second line. We believe it makes sense to add nadunolimab, which has a very favourable toxicity profile compared to chemotherapy, though it remains to be seen how patients can tolerate a triple combination. Although it will be studied in refractory patients, we see no reason for it not to be tested in treatment naïve patients as well in the first line in the future.

Based on the forecasts of Datamonitor for patients ineligible for intensive induction in the first and second line AML, we assume a treatment rate of 15% in the first line (assuming more competition there) and 20% in the second; we assume a treatment period of 8 months in the first line and 3 months in the second. As a comparison, the event-free survival was 5.8 months in the first line and 2.3 months in refractory patients in a small study (Garciaz et al. 2022).

Nadunolimab will also be tested in myelodysplastic syndrome (MDS), which is similar to and sometimes a precursor of AML. Treatment is also similar to MDS. Datamonitor Healthcare estimates that in 2022, there were 232,800 incident cases of myelodysplastic syndrome (MDS) worldwide. We do not possess detailed forecasts for the treatment of myelodysplastic syndrome. We will make the simplified assumption that nadunolimab sales in intermediate or high-risk MDS are equal to to the sales in first-line AML above, as the market potential should be similar.