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Topline Summary
Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) is a commercial-stage biotech company producing antibody-based therapies for the treatment of cancer. Despite having growing sales of an approved product, and a fairly broad pipeline of other projects, YMAB is valued by the market as if they were an early-stage pre-commercial biotech. This lost investor confidence means opportunity for would-be buyers today, provided you manage the risk.
Pipeline Overview
Naxitamab
YMAB’s approved product is a monoclonal antibody targeting GD2 called naxitamab, branded Danyelza. GD2 is an important cell surface antigen currently being exploited in the treatment of neuroblastoma, one of the more common forms of childhood cancer.
Naxitamab was granted accelerated approval in 2020 when used in combination with GM-CSF for patients with relapsed/refractory, high-risk neuroblastoma that has metastasized to the bone or bone marrow. This initial approval was based on findings from a pair of phase 2 studies, which showed response rates of 34% and 45%.
We have not seen a lot of clinical results for this agent in 2023. One poster presentation at ASCO detailed more follow-up to Study 201, indicating ongoing favorable response rates in patients with relapsed and refractory neuroblastoma. Naxitamab also gained approval in Brazil back in May 2023, further opening up global markets for the company.
Naxitamab has been assessed in the frontline setting, as well, though we have not seen further progress on this since a presentation a few years ago. They are also conducting a phase 2 study in patients with previously treated osteosarcoma, for which we have not yet seen results.
Omburtamab
A much less successful story for YMAB is the development of a radiolabeled anti-B7-H3 antibody called omburtumab, which received a 16-0 “no” vote from an Oncology Drug Advisory Committee convened to consider the clinical merit of this agent in pediatric patients with neuroblastoma. The company currently lists no ongoing trials for omburtumab, and they disclosed in their latest filing that there is no guarantee that this once-promising project would be able to continue development. For the time being, their focus is on developing other projects.
GD2-SADA
In 2023, YMAB has shifted its attention to developing its SADA platform, a multistep treatment approach whereby the patient receives an antibody that is bispecific. In this case, YMAB’s product binds to GD2, which we already discussed is an important antigen target in a few cancers, as well as DOTA, a molecule routinely used in lab to bind heavy metals. The SADA domain helps to form complexes of 4 of these molecules that bind together and can break apart over the course of several hours in the blood circulation.
This self assembly and disassembly helps to keep these bispecific antibodies in the circulation long enough to bind, but once broken apart form molecules that can be cleared by the kidneys, with the hope that this will improve the therapeutic index of the treatment.
Finally, delivery of a radioisotope into the blood allows for capture by the anti-DOTA portion of GD2-SADA, which should be bound to the tumor cell, helping to deliver radiation precisely to tumors, before being cleared out by the kidneys.
YMAB initiated a phase 1 trial back in April, and the design of the study was presented at ASCO 2023. They are also exploring alternative targets for the SADA platform like CD38, but nothing concrete has been announced to date.
Financial Overview
At the end of Q2 2023, YMAB held $88 million in cash and equivalents, with total current assets reaching $116 million. Meanwhile, their product revenues were $20.8 million, more than doubled from the 2nd quarter 2022 ($9.8 million).
Faced against a total operating cost of about $28 million, the total loss from operations for YMAB was $7.2 million for the quarter, and after interest income, the net loss was $6.3 million. Given this burn rate, YMAB has around 3 to 3.5 years of cash in the tank to fund operations.
Strengths and Risks
Given that YMAB’s GD2 drug is not the only one on the market, we can assess some of the competition to see what the ceiling might look like for this agent. United Therapeutics has Unituxin, which had $44.3 million in sales in Q2 2023. So YMAB could indeed grow their sales past their operational expenses at this rate, finding profitability in just the one drug. But this will definitely require careful cost controls, as well. It is noteworthy, though, since a lot of companies find themselves using the revenue to offset massive losses, and for YMAB the clock isn’t ticking quite as loudly.
But with the failure of omburtumab (so far), that clock is really ticking, and this explains why YMAB has fallen so far off the good graces of investors. The company doesn’t have a clear plan in place at this time for how they’re going to advance their sales, and if omburtumab ends up shelved permanently, then we’re looking at several years before there could be another new drug approved.
Meanwhile, the costs to fund trials will likely rise, and the losses will be harder to contain. This represents a significant risk to the company and any would-be investors. Thankfully, their current cash on hand should fund operations for another few years before needing to consider other options.
As for the emerging SADA program? It’s definitely interesting, but it’s still a science project at this point. The concept of theranostics is gaining a lot of traction in different fields, including NETs and prostate cancer, so there is a reasonable base of evidence that targeted delivery of radiation like this can work in a clinical context.
However, this 2-step approach does not have clinical evidence to back it up as of yet, so there’s no way to predict its success or failure. It looks interesting, but I wouldn’t want to be married to it just yet.
Bottom-Line Summary
YMAB has grown a strong base of sales support year over year. While they’re beaten down after a pretty critical failure, that is definitely not the end for this company. I would rate them a very tentative buy, since they have the potential to raise sales to reach profitability in the mid-term. But it should be considered with extreme caution, because they currently have no “flagship” developmental product that could really move them forward, so they could very well find themselves in the purgatory of a drug with limited scope funding projects that never bear fruit, in which case this ~$200 million market cap is not likely to change that much.