ITUS: an Exciting Cancer Story, Part 2(b)

On November 13, ITUS Corporation announced that they had licensed a cancer therapy from the Wistar Institute, a Philadelphia based biomedical research organization. In doing so, ITUS has suddenly become a player in the hottest space in the medical industry, CAR-T.

Chimeric Antigen Receptor T-Cell (CAR-T) technology is the latest step in curing cancer. This promising therapy is the hottest subset of a new cancer field known as immunotherapy.  The ultimate personalized therapy, CAR-T involves removing and enhancing T-Cells from each individual cancer patient. T-Cells are the body’s most powerful white blood cells that attack cancer and, by enhancing them, they become very effective cancer killers, directly targeting receptors on the tumors.

Once re-injected into the cancer patient, they are like heat seeking missiles, going directly after their targets. The results of which have been incredible, with terminal patients often showing complete remission…an accomplishment heretofore deemed impossible.

With the results being so successful, CAR-T technologies are receiving large sums of investment dollars and garnering significant interest from both investors and large pharmaceutical and biotechnology companies. Many CAR-T companies have achieved multi-billion dollar valuations even as they simply march down the path towards an approved drug, with the poster child being KITE Pharmaceuticals which was acquired for $12 billion on the eve of their FDA approval.

With the signing of their license, ITUS is the latest entrant into this exciting branch of cancer therapy. In this piece, we will discuss the treatment that ITUS is pursuing, why we think it could be successful, their timeline and the cost for development of the therapy, and the potential impact on the stock as they make progress and if they are successful.

Bringing CAR-T to solid tumors…

To date, CAR-T has only demonstrated success in blood (or liquid) cancer tumors. While there have been quite a few companies seeking to adopt CAR-T for use in solid tumors, there has been only limited success in this regards. The technology that ITUS has licensed from Wistar is meant to address this issue, bringing an efficacious CAR-T treatment to solid cancer tumors.

Success in this endeavor is certainly not guaranteed, but the rewards for achieving results in this arena are potentially huge. Just look at the companies focused on CAR-T in liquid tumors and realize that the number of victims of solid tumors is much larger than those suffering from liquid tumors. If the Wistar therapy is successful, the impact on cancer patients, and on ITUS’ stock, should be nothing short of amazing.

The lack of efficacy to date in bringing CAR-T to solid tumors, while demonstrating success in liquid tumors, is commonly attributed to several factors. Both Novartis and Kite, the two companies with approved CAR-T therapies, have gone after B-Cell lymphomas. More specifically, these companies have gone after a target receptor (also referred to as a ligand) that is only found in certain liquid tumors: the CD-19 protein.

This has made their cancer T-Cells into “heat seeking missiles”, going straight after the receptors in the cancerous cells and ignoring all other receptors and cells. The presence in B-Cell lymphomas of a specific protein, CD-19, that is not found elsewhere has contributed greatly to the success of the Novartis and Kite treatments. The T-Cells mostly all hit their target. There are side effects that are sometimes serious, but the side effects are mostly attributable to general inflammatory responses that are due to the presence of a large number of T-cells in the body.

Furthering the success of the CD-19 targeting treatments is the fact that the target protein in not found elsewhere in the body, thus creating only one target for the killer T-Cells. This allows the modified T-Cells to attack and kill the B-cells, while not being distracted by other, healthy, cells that might have a similar receptor protein.

If a therapy specifically attacks areas beyond the tumor, dosages must be regulated. CD-19 being found only in the B-Cell lymphoma tumors allows relatively higher doses of therapeutics, thus adding to the efficacy seen in the blood cancer targeting CAR-T treatments.

An example of this dosing effect can be seen in breast cancer, in which breast cancer tumors have ligands that are found in a high concentration. Yet, they are also found elsewhere in the body, albeit in lower concentrations but in a far greater overall quantity than found in a small cancerous lump.

This means that a CAR-T targeting breast cancer, and a ligand commonly found in it, would likely attack many different cells in the body in addition to the tumor. To be dosed high enough to cure the breast cancer, the therapeutic would likely have tremendous toxicity to the recipient as a whole.

The end result of all this is that CD-19 is an ideal target for liquid tumor therapies. By targeting this protein, the T-Cells only have one target in the body and can therefore be dosed higher, making them extremely effective. However, solid tumors do not express the CD-19 target and, therefore, the efforts by companies targeting this protein are not applicable in solid tumor cancers.

Any success for companies looking to use CAR-T in solid tumors seems likely to be determined by their locating a target receptor that is not found elsewhere in the body. Doing so would enable the modified T-Cells to attack only the target tumor and to be dosed at a relatively high enough level to be efficacious.

With the locating and targeting of the Follicle Stimulating Hormone Receptor (FSHR), Wistar has possibly found a target receptor solution that will enable CAR-T to be successful in ovarian cancer. Their pre-clinical data was published in a report in January, which spoke to both its efficacy in targeting tumors, but also to its lack of toxicity.

The data published in the report demonstrated that FSHR is an effective target for CAR-T in ovarian cancer. Subsequently it has been determined that FSHR is also present in the blood vessels that feed other types of tumors, such as prostate cancer.

Yet, FSHRs have not been found elsewhere in the body. Which implies that if they can be properly targeted, there is certainly potential for a CAR-T cure for solid tumors in the license that ITUS has obtained from Wistar.

From Wistar to Moffitt…

The business plan being developed by Dr. Kumar at ITUS is one of outsourced business relationships. It is the opinion of the Company that many biotechs are too eager to develop a drug in house, building infrastructure and teams that are readily available elsewhere. In doing so, substantial sums of money must be invested and shareholders suffer substantial dilution.

ITUS is practicing an “asset light” model, whereby they outsource development of therapeutics to third parties, and look to bring in strategic partners at each stage of the process. In this scenario, ITUS is intending to take the Wistar CAR-T treatment all the way to IND filing with the FDA, then bring in a partner for human trials; they have also indicated that they might bring in a partner even earlier under the right circumstances.

In the meantime, there is more work that needs to be done on their therapy. The work done at Wistar, while very successful, was research work. It was never intended to be more than early stage work and didn’t cover toxicity or conform to GMP and GLP (Good Manufacturing and Good Laboratory Practices).  GLP and GMP are guidelines provided by the FDA for studies that will be submitted for evaluation in human patients.

This is where their relationship with the Moffitt Cancer Center comes into play. The lead researcher on the CAR-T treatment at Wistar, Dr. Jose Conejo-Garcia, has recently joined Moffitt. And, in an announcement on November 20, ITUS announced that they would be entering a research alliance with Moffitt for the further development of Dr. Conejo-Garcia’s CAR-T therapy.

The plan is for Moffitt to perform some of the same studies as Wistar, but under GMP and GLP certification. Additionally, they will perform toxicity studies. The goal for all of this is to bring the CAR-T therapy to a stage of development that will enable an IND (Investigational New Drug) filing with the FDA within two years.

Moffitt is one of the most highly regarded cancer research institutes in the world. With the team in place, led by the scientist who performed all the initial work on the therapy, they are well positioned to replicate the tremendous results found at Wistar. And, by being an outsourced solution the cost to ITUS is only $1.2M over the two years of the program.

This last point really needs to be emphasized…for ITUS to take the CAR-T therapy from the lab to an IND will only take two years and $1.2M.

It’s a very short timeline and an incredibly small amount of money for what would likely be massive value creation for the Company. ITUS has enough cash on the balance sheet to fund the program, has a partner (with an experienced team) in place, and the therapy has had great results in preliminary trials. It appears that ITUS has a more than decent chance of success here.

What would success look like?

Ovarian cancer is a very deadly disease. It ranks as the fifth most common cause of death among women who get cancer; there are about 22,000 new diagnoses every year and around 14,000 deaths from ovarian cancer.

The market for a drug that treats ovarian cancer would be huge. For a little perspective on the opportunity, realize that both Novartis and Kite’s CAR-T therapies are going after forms of B-Cell cancer. Their areas of focus have patients that number well under 10,000 combined. Even if they are use off label (a big question at $400,000 per treatment), the total market size for these drugs is around 15,000 patients.

The market ITUS is looking to enter is larger than that of all B-Cell CD-19 CAR-T therapies combined. And, if they are successful, they would not only be the only entrant into this market, but they believe there’s a good chance their therapy could also work in other cancers, such as prostate.  If B-cell cancer therapies are worth billions (and even $12 Billion), imagine the value of the first company that demonstrates success in solid tumors for which the market potential dwarfs the B-cell cancers.

There are obviously a lot of hurdles to clear between now and a successful IND filing. It’s almost too early to consider what the effects of this would be; except to acknowledge that success would likely translate into over $1B in market valuation for ITUS just at the time of an accepted IND alone.

On the path to getting an IND filed, we expect ITUS to demonstrate and disclose positive data, which will drive valuation, and if the company is able to sign a corporate partner that will provide capital and credibility, we expect ITUS to increase in value, and all for only about 50K of additional burn per month ($1.2 MM over 24 months).

Meanwhile, with a $45M market cap today, a very interesting cancer diagnosis program underway, and a potential blockbuster CAR-T therapy in pre-clinical tests at Moffitt, ITUS appears to be a very attractive and interesting opportunity for investors looking for companies that are doing what was once considered impossible…finding a cure for cancer.

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