Portage Biotech (OTC Pink: PTGEF) (CSE: PBT.U) is an emerging biotechnology company developing an immunotherapy focused pipeline to treat a broad range of cancers. Unlike most biotechs, though, Portage focuses on combining its own technology with already proven immune-boosting PD1 agents.
That strategy may be advantageous on several fronts and positions Portage to develop multiple combination-agent partnerships to leverage into the competitive and potentially lucrative immunological sector. Rather than speculate on its opportunities, which we believe to be substantial, Soulstring Media reached out to Dr. Ian Walters, CEO of Portage, allowing him to respond to recently received investor questions. His responses layout near-term expectations for Portage and provide an informative overview of its potential.
SMG: Portage may be one of the most misunderstood cancer immunotherapy stocks in the sector. Part of that is the characterization of an OTC Pink listing, which can obfuscate a company’s true value. Before moving into Portage’s science, let’s address the elephant in the room- when is your expected uplist?
IW: Our team is really focusing on making our Company and its stock more investor-friendly. In respect to the question, it is important to note, there is no simple panacea. Up-listing is simply one of many factors needed to work cohesively as part of our proactive investor relations philosophy, which we will be implementing over the coming year with the overall aim of facilitating investor-base expansion and increased share liquidity.
Achieving these goals will help enable market reflection of Portage’s true value. Still, it will require many other tactical considerations (e.g., ‘blocking & tackling) such as registering shares, more transparency and timeliness on our filings, better communication with the street (including R&D days), investor targeting to institutions and specialist investors, participating at banking conferences and securing sell-side research analyst coverage. All of these efforts require a certain choreography and timing for maximal impact. We are working diligently on these efforts and will roll them out in the near future.
Q. That could add institutional investors to the mix, which can add considerable value based on the capital structure and low share float of the company. But, really, the science behind your products is what is intriguing. Can you explain the Portage asset pipeline?
IW: Portage is really focusing on resistance pathways to the current blockbuster checkpoint drugs. Knowledge of this space began when we were at Bristol Myers Squibb (BMY) and developing their immunotherapies. We have worked hard to acquire numerous platform technologies with first in class/best in class products in this area. Our goal is to get our products to human proof of concept and then seek partnership deals with Big Pharma.
Q. In a recent interview, you discussed the growth of immunotherapies to treat cancer. It’s a $20 billion industry today and is expected to grow into a $100 billion sector in the coming years. How can Portage fit into the mix?
IW: It is an unprecedented time for the oncology industry where there are 12 approved PD1 agents with very little difference among the different company’s science. This sort of sets up a commodity scenario in which the only way to differentiate is to have a priority combination. That is where we fit in, by developing multiple combination partners to capitalize on this competitive environment for scarce novel agents, which continues to drive up the deal value that other companies have been able to negotiate. This upward pressure on deal economics is also driven due to fear that a competitor might have a better checkpoint combination.
To better leverage and capitalize on this competitive dynamic, Me and my team have a lot of connections with the business and scientific staff at the big pharma companies working in this area who are potential acquirers of our products. We periodically engage in discussions with these people to determine their needs and to discuss our programs. In fact, before we license in technology, we usually run it by them to understand the data package they would need to want to acquire one of our products, so the hurdles are well understood.
Q. Investors that have been with Portage were likely part of the Biohaven spin-off. The company turned a $7 million investment into a $700 million dividend. Is there a similar potential for assets to be spun off?
IW: We take a very pragmatic, capital-efficient, and de-risking approach to maximizing the value of our developmental assets. For example, at the appropriate time, if and when we have an exit (IPO, license, or M&A) of one of our products or platforms, we would evaluate the best way to distribute the proceeds to our shareholders.
With Biohaven, we utilized approximately $10M of the proceeds to fuel Portage’s growth and distributed the rest. Our organizational structure enables a similar exercise if and when we have an exit. Keep in mind that the current overhead burn rate for Portage is approximately USD 2M per year, so we do not need to keep large amounts of cash on hand to have sufficient runway. Of course, expenses are expected to increase as we continue to grow, but we expect our strategy’s continued execution will reward shareholders. The beauty of the Portage model is there are “many ways to win” as we have multiple chances for these types of value return and are not entirely dependent on any one platform (i.e., Intensity or iOx)
Q. In a recent interview, you discussed the company initiating at least 2 human clinical trials by the end of this year. Can you discuss the areas of interest?
IW: We have 2 products that we are progressing into the clinic from our license with Oxford University. These products are quite interesting, and they represent a novel approach for priming and boosting an immune response and have been shown in animal models to reverse resistance to PD1 treated animals (via invariant Natural Killer T-cell (iNKT) agonism). We have robust trial designs that include a randomized assessment of our drug versus an anti-PD1 antibody versus the combination of the 2. This trial design will provide a substantial data set for discussion with potential pharma partners.
We also have a second compound supported by a grant from the EU (Horizon 2020) to evaluate a combination product of our iNKT agonist co-formulated with a vaccine. This trial is also set to begin shortly. We are expanding the team and refining our development strategy. I am proud of the team’s accomplishments to this point and look forward to collecting our clinical data in the upcoming year.
Furthermore, these development programs are illustrative of Portage’s unique access to novel technology and capital-efficient/de-risking approach development to create shareholder value.
Q. Your company owns roughly 10% of Intensity Therapeutics. Talk about that asset?
IW: Intensity is working on a technology to facilitate active drugs to specifically enter cancer cells and spare healthy cells. The first product, called INT230-6, resulted from a screen looking for the best way to kill cancer cells. This product was developed in collaboration with top scientists at the National Cancer Institute division of the NIH. They showed in animals (data is published in the Oncoimmunology journal) that this product kills the cancer in a specific way that promotes an immune response (i.e., a vaccine like response) to an individual’s cancer inside the body.
We have now studied this product in 60 patients with different types of cancers and seen the ability to safely kill the majority of the cancer cells and promote an immune response to the cancer. That action is very exciting for us. Also, we have been able to deliver over 3 times the approved dose of these killing agents and showed that 95% goes into and stays in the tumor directly without the typical side effects of these drugs when delivered IV.
Data was recently presented at the SITC conference, and it showed, especially in the individuals who have failed all available therapies and received the proper dosing to their tumors, that these patients had a very good long-term survival. The FDA has reviewed our data and has granted us fast track status for the treatment of triple-negative breast cancer.
We have also shared this data with big pharma companies and have secured collaboration agreements with Merck to study our drug in collaboration with Keytruda, and with BMS to study our drug in collaboration with Yervoy.
Also, we are in the middle of eight Phase 2 cohorts in different tumor types that should be yielding results in the coming year. So, there is a lot of progress going on with this technology, and we have begun to create next-generation constructs leveraging this exciting platform.
Q. Again, immunotherapy is a big business and is a pillar of the Portage pipeline. Can you discuss recent progress and near-term goals?
IW: We have been testing 10 different products across several different technology platforms. We continue to progress programs through rigorous screening and de-risking experiments. As illustrated above, we are soon to have 3 in human testing. Our goal is to continue advancing our early projects and achieving value inflection developmental milestones while adding new programs into human testing each year.
Q. Back to your recent interview. You mentioned a company, Nektar Therapeutics, earning a $10 billion licensing agreement based on data from roughly 40 patients. That went to Bristol Myers Squibb. Of course, you are no stranger to BMS and understand the value of licensing and partnership agreements. Which Portage programs excite you the most in terms of potential deal value?
IW: All the products we are working on are like children, and I can’t pick my favorite. They were rationally designed with clear go/no go criteria in mind and will only be pursued if there is clear evidence on their role in our view of the future landscape of immunotherapy. We work to de-risk them and build a differentiated profile from what others have and will be doing in the future. It is my goal that we can unlock their value in the next 1-3 years.
Q. Finally, 3-6 months from now…where do you expect to see Portage in terms of clinical progress, and what is the end-goal?
IW: Portage anticipates having 3 clinical programs with several active clinical studies during the first quarter of 2021. While drug development is not a sprint but a marathon, Portage is executing on many pipeline assets to deliver a plethora of de-risking/value-creating milestones, with the ultimate goal of bringing better therapeutic treatments to help cancer patients.
End interview
Trading at roughly $12.00 per share and a market cap of about $149 million, Portage Biotech may represent a clear value opportunity based on the near-term expectation for multiple human studies alone. Also, by burning only $2 million per year to fund operations, the near-term fear of dilution is undoubtedly mitigated.
Although Dr. Walters was understandably hesitant in making valuation assumptions, it’s fair to assume that its multiple assets bring strategic opportunities that can add substantial shareholder value in the coming months. The company has a robust pipeline, cash on hand, and a management team that is highly respected and proven to deliver extraordinary shareholder value over time
Those ingredients create a recipe that often translates into success. Portage Biotech is well-positioned to prove that point- and may need only a couple of quarters to do so.
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