Small Caps | 10:30 AM
By Tim Boreham
ASX code: ((ALA))
Shares on issue: 1,050,775,660
Market cap: $157.6m
Chief executive officer: Dr Michael Baker
Board: Dr Thomas Duthy (chair), Dr Baker, Dr Debora Barton, Dr Elizabeth Stoner, Gary Phillips, David Simmonds
Financials (June quarter 2024): receipts nil, net cash outflows -$1.82m, cash balance $12.7m, quarters of available funding: 7.0
Identifiable major shareholders: Merchant Funds Management 6.02%, Richard Mann (Mann Beef Pty Ltd) 6.16%, MB Investment Capital 2.64%, James Evans Hughes-Morris 2.1%
Fickle fashion trends don't just apply to apparel: a hot area two years ago, the cell therapies sector is struggling to retain investor interest amid hyped-up expectations, clinical setbacks and high development and manufacturing costs.
In the frank words of Arovella chief Michael Baker: "It's in the worst shape it has been since the highs of 2018 to 2020."
Dr Baker points to lay-offs and shutdowns among the expanding US cell manufacturing companies.
"A lot of them came out of the woodwork but should not have and will eventually fall away," he says.
Cell therapy refers to extracting human cells from a patient or donor and tricking them up so they can fight disease more effectively.
There's a silver lining to the malaise: pharmaceutical companies are still paying big dollars for the emerging players, even at early (phase I) clinical phase.
Arovella is seeking to overcome the problems of CAR-T (chimeric antigen receptor) therapies by involving invariant natural killer (INKT) T- cells, one of the body's strongest immune cells which Dr Baker dubs the "soldiers of the blood stream".
"They are rabid killers and we can manufacture them so they are even more potent and then we will give them to patients," he says.
Arovella's lead blood cancer program is about to enter phase I trials, but the company is also eyeing developing the world's first CAR-INKT therapies to tackle gastric, oesophageal and pancreatic cancers.
"This is a very important area for the large pharma companies and we are happy to be in a very niche area of the sector," Dr Baker says.
Straight as an arrow
Arovella started out as Eastland Medical, which listed in 2001, first for syringes and then its unsuccessful Artimist sublingual malaria treatment.
Eastland became Suda Pharmaceuticals in 2012 developing a spray-based oral drug delivery platform called Oromist, and took the insomnia treatment, Zolpimist, to market.
Biotech entrepreneur Paul Hopper took over as executive chair in 2019 and oversaw sweeping changes.
These included appointing Bioscience Managers investment guru Dr Baker as CEO, ditching the oral delivery program and closing the company's Perth research and development headquarters.
In June 2021, Arovella signed a deal with Imperial College London to acquire its invariant natural killer T (INKT) cell platform.
INKT cells are a rare variant of T-cells. The acquired program, ALA-101 targets a blood cancer marker called CD19 (see below).
In October 2021, the company changed its name to Arovella, which derives from arrow (as in targeted drug delivery) and novel (as in new therapies).
Mr Hopper quit the board in June 2022, with Dr Thomas Duthy eventually becoming chair. Dr Duthy's day job is heading Neurotech, which is developing cannabinoid-based treatments for childhood neurological disorders.
In September 2022, Arovella entered a joint development program with the ASX-listed Imugene - of which Mr Hopper is chair - but in March this year Imugene said it no longer wanted to continue.
Prt porter cells
The US Food and Drug Administration has approved six CAR-T treatments, all of them targeting CD19 or the B-cell maturation antigen (BCMA) for blood cancers (leukaemia, lymphomas and multiple myelomas).
But because of the incidence of secondary malignancies, albeit low, they all come with an FDA black box' warning.
Most of the treatments are based on using the patient's own cells - the autologous approach - which is more bespoke but takes longer, is more expensive and uses potentially compromised cells.
Arovella seeks to avoid the problems with the allogeneic method, by which cells are derived from healthy donors.
The doses are stored at minus -170C and are shipped to clinical sites when needed.
Dr Baker notes that bog-standard T-cells account for 70% of the body's immune cells, while 10 to 15% are natural killer' (NK) cells.
The elite INKTs make up 0.1 to 1.0%.
"Both [T-cell and NK cells) have limitations: T-cells can't be used off-the-shelf unless they are genetically engineered, which requires an extra step," he says.
"NK cells can be given from one person to another, but the desired level of activity has not been seen to date."
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