OnCusp Therapeutics investment analysis

January 16, 2024

This is not investment advice. We used AI and automated software tools for most of this research. A human formatted the charts based on data / analysis from the software, prompted the AI to do some editing, and did some light manual editing. We did some fact checking but cannot guarantee the accuracy of everything in the article. We do not have a position in or an ongoing business relationship with the company.

Overview

OnCusp Therapeutics, Inc., founded in April 2021 and based in New York City, specializes in developing novel cancer therapies. Their lead candidate, CUSP06—an antibody-drug conjugate (ADC) targeting CDH6—leverages a proprietary antibody linked to the exatecan payload via a protease-cleavable linker. CUSP06 is designed with best-in-class features, including increased potency, a bystander effect, improved linker stability, and reduced susceptibility to drug resistance mechanisms. It is set to begin Phase I clinical trials in the United States following FDA IND acceptance in Q3 of 2023.

The private company has secured $139 million in funding, including an oversubscribed Series A round of $100 million, led by prominent investors such as Novo Holdings, Orbimed, and F-Prime Capital.

Pipeline overview

Product name	Modality	Target	Indication	Discovery	Preclinical	Phase 1	Phase 2	Phase 3	FDA submission	Commercial
CUSP06	Antibody-drug conjugate	CDH6 Antibody-drug conjugate	Solid tumors
CUSP03	Small molecule	Undisclosed Inhibitor	Hematological + Solid Tumors
CUSP02	Bispecific antibody	Undisclosed Antibody	Hematological + Solid Tumors

Highlights and risks

Valuation

We did not perform a valuation analysis due to the early-stage nature of the company.

CUSP06

Scientific thesis

The therapeutic rationale for a CDH6 antibody-drug conjugate (ADC) in solid tumors relies on several key points that are derived from the understanding of cancer biology and the mechanisms of action of ADCs.

1. Target Expression on Tumor Cells: CDH6, short for Cadherin-6, is a type of protein that may be overexpressed on the surface of certain tumor cells. It belongs to the cadherin family, which are calcium-dependent adhesion molecules important in the formation of tight junctions between cells. Overexpression of certain cadherins has been implicated in cancer progression, metastasis, and resistance to therapy. If CDH6 is overexpressed specifically on cancer cells relative to normal cells, it provides an opportunity to selectively target these tumor cells.

2. Antibody Specificity: An anti-CDH6 antibody can be engineered to bind specifically to the CDH6 protein. The high specificity of the antibody ensures that the drug conjugate predominantly targets cancer cells expressing CDH6, which minimizes damage to normal cells that do not express the protein, or express it at much lower levels. This selective targeting is crucial to reducing side effects and increasing the therapeutic index of the drug.

3. Drug Conjugation: An ADC is composed of an antibody linked to a cytotoxic drug (also known as a payload). The drug is usually a powerful chemotherapeutic agent that, on its own, would be too toxic to administer systemically at therapeutic doses. By linking the drug to the antibody, it can be delivered directly to the cancer cells.

4. Internalization and Drug Release: Once the antibody portion of the ADC binds to CDH6 on the surface of the tumor cell, the complex is internalized into the cell. After internalization, the ADC is trafficked to lysosomes where the linker between the antibody and the cytotoxic drug is cleaved, thereby releasing the drug within the cell.

5. Mechanism of Action of the Drug: The cytotoxic drug is typically designed to interfere with essential cellular processes, such as DNA replication or the mitotic spindle formation, leading to cell death. Since the drug is released inside the tumor cell, it can exert its therapeutic effect with high local concentrations.

6. Reduction in Systemic Toxicity: Because the drug is targeted directly to the tumor cells rather than being freely circulated and distributed throughout the body, systemic toxicity is reduced compared to traditional chemotherapy; this can result in greater patient tolerance for the treatment.

7. Potential for Overcoming Drug Resistance: ADCs can deliver highly potent drugs that can overcome mechanisms of resistance to standard treatments, either by the nature of the cytotoxic agent chosen or through bypassing efflux pump systems commonly upregulated in resistant cancer cells.

Therefore, the development of a CDH6 ADC for treatment of solid tumors is based on targeting capabilities that aim for selective delivery of highly potent cytotoxic agents to CDH6-expressing tumor cells, allowing for focused antitumor activity while aiming to spare normal tissues and thereby reducing side effects. This targeted approach is expected to lead to enhanced treatment outcomes in patients with solid tumors that overexpress CDH6.

The science behind antibody-drug conjugates (ADC) is well established and several ADCs have been approved for use by regulatory agencies such as the U.S. Food and Drug Administration (FDA) for the treatment of various cancers. The general principles I described, such as selective targeting of cancer cells, antibody specificity, drug conjugation, and internalization leading to cell death, are grounded in years of cancer research and drug development.

However, each individual ADC, including those targeting CDH6, must be rigorously tested and validated through preclinical and clinical studies to determine its safety, efficacy, and the ideal patient population. There are several areas that are still subject to ongoing research and scientific debate:

1. Target Validation: The degree to which CDH6 is overexpressed in solid tumors and its role in tumorigenesis is a critical area of ongoing investigation. Moreover, variability in CDH6 expression among different types of solid tumors and among patients with the same type of tumor can impact the efficacy of a CDH6-targeted ADC.

2. Linker Stability: The chemical linkers that attach the cytotoxic drug to the antibody must be stable enough to remain intact in the bloodstream but cleavable once inside the tumor cell. Creating linkers that meet these criteria is technically challenging, and inappropriate linker cleavage can cause off-target toxicity.

3. Drug Potency and Resistance: The choice of cytotoxic payload is key. It must be potent enough to kill cancer cells at the quantities delivered and must also be capable of overcoming potential resistance mechanisms within those cells. The evolution of resistance to ADC therapies is an area of significant research.

4. Internalization and Processing: The process of ADC internalization and the subsequent release of the cytotoxic drug within cancer cells are complex and can vary between different types of cells and ADCs. Challenges include variability in endocytosis, lysosomal processing, and escape of the payload into the cytoplasm.

5. Bystander Effect: Some ADCs are designed to allow the cytotoxic drug to diffuse to neighboring tumor cells, which may not express the target antigen. The implications of this bystander effect, both beneficial and potentially harmful, are actively being explored.

6. Therapeutic Window: Balancing efficacy with safety is crucial, and the therapeutic window—the dosage range in which a drug is effective without being excessively toxic—is a focal point in the development of any new therapeutic, including ADCs.

7. Patient Selection: Identifying which patients are most likely to respond to treatment with a CDH6 ADC requires reliable biomarkers and may involve developing companion diagnostic tests to assess CDH6 expression levels in tumors.

The overall level of evidence supporting ADC processes is robust, given the approvals and clinical successes of ADCs such as trastuzumab emtansine (Kadcyla®) for HER2-positive breast cancer and brentuximab vedotin (Adcetris®) for certain types of lymphoma. However, the evidence for a CDH6 ADC specifically would be in a more preliminary stage, encompassing lab-based studies and early clinical trials. The entire process from discovery to clinical approval can take many years and is subject to stringent regulatory assessments to ensure that a new drug is both safe and effective for its intended use.

CDH6, or Cadherin-6, is one of the many types of cadherin molecules involved in cell adhesion, and aberrant expression of cadherins has been linked to cancer progression and metastasis. However, the specific role of CDH6 in solid tumors and its utility as a therapeutic target may not be as well-characterized as some other members of the cadherin family, such as E-cadherin or N-cadherin.

In general, the literature may support CDH6's role in solid tumors through several mechanisms:

1. Expression Pattern: Research might highlight that CDH6 is upregulated in certain types of solid tumors when compared to normal tissues, making it a potential target for selective therapy.

2. Tumorigenesis: Studies could show that CDH6 contributes to tumorigenesis processes, such as increased cell proliferation, migration, invasion, and resistance to apoptosis, which are critical aspects of cancer development and progression.

3. Correlation with Prognosis: There may be publications indicating that high levels of CDH6 expression correlate with poor prognosis, more aggressive tumor behavior, and lower survival rates in patients with certain types of solid tumors, suggesting that CDH6 could be a marker of tumor aggressiveness.

4. Preclinical Models: Preliminary studies using cell lines and animal models could provide evidence that targeting CDH6 with antibodies or small molecules inhibits tumor growth and metastasis, which can justify further exploration into ADCs targeting CDH6.

5. Therapeutic Targeting: If there is any early-phase clinical trial data available, it might offer preliminary insights into the safety and efficacy of CDH6-targeted therapies, including ADCs, although such data would need to be interpreted cautiously and would require validation in larger, more definitive studies.

Strengths of the Evidence Base:

1. Biological Plausibility: If CDH6 is found to be overexpressed on certain tumor cells and plays a role in their growth and survival, this basic biological understanding forms a strong foundation for targeted therapy.

2. Proof of Concept: The overall concept of ADCs is well-validated, with several FDA-approved ADCs used clinically. This demonstrates the potential efficacy of the ADC approach for cancer treatment.

3. Preclinical Studies: Preclinical data from cell culture and animal models can demonstrate the effectiveness of CDH6 targeting in reducing tumor growth and may support its further clinical development.

4. Target Specificity: If the CDH6 expression is predominantly tumor-specific, it represents an opportunity to maximize the efficacy of the payload delivery, while minimizing off-target effects.

5. ADC Technology Advances: Continuous improvements in the design of ADCs, including more stable linkers and potent payloads that have fewer off-target effects, strengthen the rationale for developing new ADCs.

Weaknesses of the Evidence Base:

1. Target Expression Variability: Heterogeneous expression of CDH6 among different cancers and within the same cancer type can complicate the identification of appropriate patient populations for treatment.

2. Clinical Data: At the early stages of research, there may be limited or no clinical trial data to establish safety, efficacy, and optimal dosing of CDH6-targeted ADCs.

3. Resistance Mechanisms: Tumors may develop resistance to ADC therapy through various mechanisms, and the understanding of resistance specifically related to CDH6-targeted treatment may be inadequate.

4. Biological Complexity: The role of CDH6 in the context of tumor biology may be complex, with potential compensatory mechanisms that could diminish the efficacy of CDH6 targeting.

5. Safety Profile: Potential on-target, off-tumor toxicity due to low-level expression of CDH6 in normal tissues, as well as potential for systemic toxicities due to linker or payload issues, are concerns that need to be addressed with solid evidence.

6. Limited Generalizability: If current evidence is based on a few tumor types or specific subsets of cancer patients, the generalizability to all solid tumors may be weak.

Market overview

Solid tumors

Solid tumors are a diverse group of cancers that occur in various organs, such as the breast, lung, prostate, colon, and rectum. These cancers represent a substantial burden of disease worldwide and account for a majority of cancer diagnoses. For example, breast cancer is the most common cancer in women, lung cancer leads in mortality for both men and women, and colorectal cancers are also significantly common.

Current treatments for solid tumors can include surgery, radiation therapy, chemotherapy, targeted therapies, and immunotherapy. The choice of treatment largely depends on the type of tumor, its stage, and its molecular characteristics. However, despite advances in these treatments, there remains a significant unmet medical need, as patients often experience recurrence, drug resistance, or unacceptable side effects.

Several successful drugs have been developed for the treatment of solid tumors. For example:

• Chemotherapy drugs like doxorubicin, cisplatin, and 5-FU have been widely used but are associated with severe side effects.
• Targeted therapies, such as trastuzumab for HER2-positive breast cancer, have improved outcomes for patients with specific tumor markers.
• Immunotherapies like pembrolizumab (Keytruda) and nivolumab (Opdivo) have revolutionized treatment for certain solid tumors with durable responses in some patients, but not all patients benefit from these treatments.

CUSP06 could address the unmet medical need by providing improved efficacy, reduced side effects, greater ease of administration, or better patient quality of life compared to the existing standard of care. The potential of CUSP06 would also depend on its ability to treat a wide range of solid tumors or efficacy within a specific subset of solid tumors that are currently hard to treat, such as those with specific molecular characteristics that make them resistant to other forms of therapy.

If CUSP06 demonstrates a substantial clinical benefit in ongoing trials, especially for cancers that lack effective treatments, it could capture a significant share of the market. Crucial factors contributing to its market success would include its safety profile, the cost of therapy, reimbursement policies, and its position within treatment guidelines.