Business Overview and History
Candel Therapeutics, a clinical-stage biopharmaceutical company, is at the forefront of developing innovative viral immunotherapies to help patients fight cancer. With a focus on harnessing the power of the immune system, Candel’s pipeline of product candidates, CAN-2409 and CAN-3110, aims to transform the treatment landscape for a variety of solid tumor indications.
Candel Therapeutics was incorporated in Delaware in June 2003 under the name Advantagene, Inc., with a focus on developing off-the-shelf viral immunotherapies to treat cancer. In December 2019, the company licensed substantially all the assets of Periphagen, a company focused on engineering herpes simplex virus (HSV) as a gene therapy vector. This acquisition expanded Candel’s pipeline to include HSV-based product candidates in addition to its adenovirus-based programs.
In September 2020, Candel licensed CAN-3110, an HSV-based oncolytic immunotherapy, from Mass General Brigham, adding a second clinical-stage program to its portfolio. Around this time, the company formally changed its name from Advantagene to Candel Therapeutics, Inc. to better reflect its focus on developing viral immunotherapies.
Candel completed its initial public offering in July 2021, raising $71.3 million to support the advancement of its pipeline. This included its lead adenovirus-based candidate CAN-2409, which was in late-stage clinical trials for prostate cancer, non-small cell lung cancer, and pancreatic cancer, as well as the HSV-based CAN-3110 which was in an early-stage trial for recurrent high-grade glioma.
Over the next few years, Candel faced several challenges, including the need to expand its manufacturing capabilities to support clinical development and potential commercialization. The company also encountered issues with its manufacturing processes, which required updating its stability testing program and submitting additional information to the FDA. Despite these obstacles, Candel was able to continue advancing its clinical programs and report positive data from studies of CAN-2409 in lung cancer and CAN-3110 in glioma.
Financial Snapshot
As of September 30, 2024, Candel Therapeutics reported cash and cash equivalents of $16.60 million. The company has not generated any revenue from product sales to date, as its lead product candidates are still in clinical development. For the nine months ended September 30, 2024, Candel reported a net loss of $41.10 million, compared to a net loss of $26.84 million for the same period in the prior year.
Candel has funded its operations primarily through the issuance and sale of its convertible preferred stock and common stock, as well as through debt financing. In February 2022, the company entered into a $25.00 million loan and security agreement with Silicon Valley Bank, of which it borrowed $20.00 million.
For the most recent fiscal year, Candel reported no revenue, a net loss of $37.94 million, operating cash flow (OCF) of -$34.24 million, and free cash flow (FCF) of -$34.70 million. In the most recent quarter, the company reported no revenue, a net loss of $10.65 million, and both OCF and FCF of -$6.57 million. Compared to the same quarter in the previous year, the net loss increased from $8.44 million, primarily due to an increase in the change in fair value of the warrant liability. The company’s OCF and FCF also decreased from the prior year quarter as Candel continues to incur expenses related to its clinical development programs.
Liquidity
Candel Therapeutics’ liquidity position remains a critical factor in its ability to continue operations and advance its clinical programs. With $16.60 million in cash and cash equivalents as of September 30, 2024, the company will likely need to secure additional funding to support its ongoing research and development activities. The company’s ability to raise capital through equity offerings, debt financings, or strategic collaborations will be crucial for its long-term sustainability and the advancement of its product candidates through clinical trials and potential commercialization.
As of September 30, 2024, Candel’s debt-to-equity ratio stood at -1.01, reflecting the company’s negative equity position due to accumulated losses. The company’s current ratio and quick ratio were both 1.18, indicating that it had sufficient short-term assets to cover its short-term liabilities. However, the company no longer has access to borrow the additional $5 million under its $25 million term loan facility with Silicon Valley Bank, as $20 million has already been drawn down.
Recent Developments and Highlights
In November 2023, Candel reported positive overall survival data from its phase 2 randomized controlled clinical trial of CAN-2409 in borderline resectable pancreatic cancer. The trial demonstrated a median overall survival of 28.8 months in the CAN-2409 treatment group compared to 12.5 months in the control group.
Furthermore, in May 2024, the company presented positive topline overall survival data from its phase 2 clinical trial of CAN-2409 in NSCLC patients who had an inadequate response to prior immune checkpoint inhibitor therapy. The data showed a median overall survival of 20.6 months following two administrations of CAN-2409 plus valacyclovir, compared to published results of 11.6 months with standard-of-care chemotherapy in a similar patient population.
Candel has also received Orphan Drug Designation from the U.S. Food and Drug Administration (FDA) for both CAN-2409 and CAN-3110, for the treatment of pancreatic cancer and recurrent high-grade glioma, respectively. These designations provide Candel with certain development and commercial incentives, including the potential for up to seven years of market exclusivity in the United States if the products are approved.
In October 2022, Candel entered into a collaboration with the University of Pennsylvania (UPenn) Center for Cellular Immunotherapies to study the impact of novel viral immunotherapy candidates from Candel’s proprietary enLIGHTEN™ Discovery Platform on strengthening the activity of UPenn’s investigational CAR-T cell therapies in solid tumors.
In November 2023, Candel’s board of directors authorized a restructuring plan that resulted in a 45% reduction in the workforce. This was done to focus on key clinical readouts for CAN-2409 and the continued development of CAN-3110 and the enLIGHTEN platform. The restructuring plan was completed in Q1 2024.
On March 15, 2024, the company notified its former CEO and Chief Scientific Officer, Dr. Aguilar-Cordova, that it had uncovered issues related to falsified sterility testing results and an inadequate stability testing program for CAN-2409. The company promptly updated its stability testing program, submitted additional information to the FDA, and determined that trial participants were not placed at risk and the integrity of the clinical data was not impacted.
Risks and Challenges
As a clinical-stage biopharmaceutical company, Candel Therapeutics faces several risks and challenges common to the industry, including:
Manufacturing and supply chain: The company’s ability to manufacture its product candidates in sufficient quantities and to maintain a reliable supply chain could impact its clinical development and commercialization efforts.
Competitive landscape: Candel operates in a highly competitive environment, with other companies developing viral immunotherapies and alternative treatment modalities for the same or similar indications. The market for viral immunotherapies is an emerging field, with few globally or FDA-approved therapies. Candel faces competition from companies such as Replimune, TILT, and ImmVira, which are developing similar technologies.
Financing and capital requirements: As a clinical-stage company, Candel will require significant additional funding to advance its pipeline, conduct clinical trials, and potentially commercialize its product candidates, if approved.
Intellectual property protection: Candel’s ability to protect its proprietary technologies and maintain its competitive position is dependent on its success in obtaining and defending its intellectual property rights.
Outlook and Conclusion
Candel Therapeutics is at the forefront of developing innovative viral immunotherapies to address the complex challenges of cancer treatment. The company’s promising clinical data for CAN-2409 in prostate cancer, NSCLC, and pancreatic cancer, as well as the ongoing investigation of CAN-3110 in recurrent high-grade glioma, underscores the potential of its viral immunotherapy platforms.
With a focus on expanding its pipeline through its proprietary enLIGHTEN™ Discovery Platform and strategic collaborations, Candel is well-positioned to continue its mission of transforming the way cancer is treated. As the company navigates the challenges of clinical development and regulatory approval, investors will closely watch Candel’s progress in unlocking the full potential of its multimodal biological immunotherapies to benefit cancer patients.
The cancer treatment landscape is evolving rapidly, with combination therapies and immunotherapies becoming more prominent. Candel’s ability to successfully develop and commercialize its product candidates will depend on its ability to differentiate itself in this competitive environment. While the company has made significant progress with its clinical programs, it continues to incur substantial operating losses as it invests in research and development to support the advancement of its pipeline.
Candel’s financial position remains a key focus for investors, given its ongoing cash burn and the need for additional funding to support its operations and clinical development programs. The company’s recent restructuring efforts and focus on key clinical readouts demonstrate its commitment to efficiently allocating resources and advancing its most promising candidates. As Candel moves forward, its ability to achieve clinical milestones, secure partnerships, and maintain a strong financial position will be crucial factors in determining its long-term success in the competitive and rapidly evolving field of cancer immunotherapy.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.