Among several pre-clinical studies underway, Race Oncology’s Zantrene drug is showing strong results in the treatment of kidney cancer.
RAC has released final data for one of its pre-clinical studies into its drug candidate, Zantrene. The program investigating the drug’s use in clear cell renal cell carcinoma (ccRCC), a type of kidney cancer, was conducted at the University of Newcastle and the Hunter Medical Research Institute.
The study found that not only did Zantrene slow the growth of kidney cancer cells on its own, but also in combination with other drugs. RAC has submitted a patent protecting its findings which, if granted, would be valid until 2042.
Not only is ccRCC the most common form of kidney cancer, but it is also particularly dangerous with few or no clinical signs until the cancer has metastasised. That leaves many patients untreated until the disease has spread throughout the body.
Clinical trials are expected to follow with a view to exploring a Phase 1/2 treatment combination human clinical trial starting as early as the end of CY22. In the meantime, RAC will conduct further pre-clinical studies to understand the mechanism of action of the Zantrene synergies and study optimal combinations in animal models.
Investment view
The kidney cancer treatment is one of three key pillars for RAC’s Zantrene drug which has demonstrated an ability to suppress FTO enzymatic activity in many types of cancer. RAC has therefore also been conducting studies in the treatment of melanoma.
Breast cancer is the second pillar with patient treatment underway for the Australian Phase 2 trial in late-stage metastatic breast cancer patients.
The third pillar is targeting AML (acute myeloid leukaemia) and now has a pathway mapped out towards FDA approval.
RAC’s strategy is to conduct pre-clinical programs which prove the efficacy and utility of Zantrene and then either license or sell it to a big pharmaceutical company. Efficacy data is often the biggest determinant of value. By accelerating the various trials across three different pillars, RAC can logically increase its chances of achieving the strategy. This is a strong and practical approach to both the scientific and commercial outcomes. We value RAC at $4.16 per share including end-December 2021 net cash of $37.1 million.
Risks to investment view
Delays or failures in trials and studies would weaken the strategy. Failure to achieve regulatory approval for treatments would also be problematic.
Recommendation
We have retained our Buy recommendation.
