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CNCR ETF Rebalance – June 2020

Jun. 16, 2020

June 16 marked the semi-annual rebalance and reconstitution of the Cancer Immunotherapy ETF’s (Nasdaq: CNCR) underlying index. This happens in two steps. First, a committee of advisors that oversees the index gets together and determines the reconstitution, which means they decide if any new companies should be added. Second, once the index’s holdings have been finalized, a rebalance occurs and each company is given equal weight. CNCR ETF then places trades to replicate those changes as closely as possible. View all holdings of the Cancer Immunotherapy ETF.

In addition, the Committee has chosen during this meeting to increase the target number of index components to 30 from 25. This change reflects the committee’s belief that the science of immunotherapy is strengthening and the pool of quality available companies is growing. The committee has been encouraged to see recent data releases in areas such as bi-specific antibodies, allogenic CAR-T, CD47, cytokines, oncolytic viruses, TIGIT, and others.

For the June meeting, the committee has added nine new immunotherapy companies. They are Adaptimmune (Nasdaq: ADAP), Arcus Biosciences (NYSE: RCUS), Compugen (Nasdaq: CGEN), Cue Biopharma (Nasdaq, CUE), IGM Biosciences (Nasdaq: IGMS), Legend Biotech (Nasdaq: LEGN), MacroGenics (Nasdaq: MGNX), Replimmune (Nasdaq: REPL), and Trillium Therapeutics (Nasdaq: TRIL).

These companies replace Atara Biothearpeutics (Nadaq: ATRA), Autolus Therapeutics (Nasdaq: AUTL), Precision Biosciences (Nasdaq: DTIL), and Ziopharm Oncology (Nasdaq: ZIOP).

Brad Loncar, CEO of Loncar Investments and Chairman of the Index Committee, had the following comments, "Our decision to increase the index’s number of components during this period is based on our committee's positive opinion of the progress being made in immunotherapy science. We are pleased to support this expanded field of companies as they aim to deliver new innovations for patients."


Adaptimmune (Nasdaq: ADAP)

Adaptimmune is known for being a leader in the T-cell receptor (TCR) cell therapy space. At the beginning of 2020, the company announced that they have seen initial responses in four types of solid tumors using their SPEAR T-cell platform. These were hepatocellular carcinoma, metastatic rectal mucosal melanoma, metastatic gastroesophageal junction cancer, and head & neck cancer. More recently at the 2020 ASCO cancer conference, Adaptimmune presented new responses in metastatic gastroesophageal junction cancer, lung, and head & neck cancer. The company also signed a partnership with Japan’s Astellas to co-develop and co-commercialize stem cell derived allogeneic CAR-T and TCR T-cell therapies.

Arcus Biosciences (NYSE: RCUS)

Arcus made headlines in May when it signed a 10-year partnership with Gilead to co-develop and co-commercialize next-generation cancer immunotherapies. Gilead paid Arcus $175 million up front, made a $200 million equity investment in the company, and Arcus is eligible to receive up to $1.225 billion in opt-in and milestone payments in regard to clinical product candidates. Arcus is currently developing a dual adenosine receptor antagonist, a CD73 inhibitor, an anti-TIGI antibody, and a PD-1 inhibitor.


Compugen (Nasdaq: CGEN)

Compugen’s three main imunotherapy drugs are a PVRIG inhibitor, an ILDR2 inhibitor, and a TIGIT inhibitor. It presented an update of an ongoing phase 1 study of the PVRIG inhibitor at the recent AACR cancer research conference earlier this year. The data showed partial responses both as monotherapy and in combination with Bristol-Myers Squibb’s PD-1 inhibitor Opdivo. A trial was also recently initiated to study PVRIG, TIGIT, and Opdivo as a triplet therapy. Compugen is also partnered with AstraZeneca to develop bi-specific antibodies, though those programs are at an earlier stage.


Cue Biopharma (Nasdaq: CUE)

Cue's lead immunotherapy drug is designed to stimulate the IL-2 receptor, which causes the growth and expansion of T-cells. We know this pathway has merit because the U.S. FDA approved an IL-2 drug over 20 years ago to treat melanoma. However, the drug can be very toxic and hard for patients to tolerate. Cue’s IL-2 approach is designed to activate tumor specific T-cells without activating T-cells throughout the rest of the body. If they are able to achieve this, it might improve the tolerability issues seen with current IL-2 medicines.


IGM Biosciences (Nasdaq: IGMS)

An immunoglobulin M (IgM) antibody is the type of antibody in your body that is first to appear in response to exposure to an antigen. IGM’s platform has been designed to create IgM antibodies with higher affinity and avidity than naturally occurring IgM antibodies. It is using the platform in a variety of settings. The lead program in a clinical trial is a T-cell engager (also called a bispecific antibody) that targets CD20 and CD3. The company also plans to file an IND (a request to FDA for approval to begin a study) for a Death Receptor 5 (DR5) antibody later this year and is also planning to develop a targeted cytokine that pairs IL-15 and PD-L1.


Legend Biotech (Nasdaq: LEGN)

Legend Biotech is a cell therapy company. It is most famous for the BCMA CAR-T it has developed. It is partnered with Johnson & Johnson (JNJ) on it. At the recent ASCO cancer conference, JNJ presented some very encouraging data from this. 100% of multiple myeloma patients responded to the CAR-T treatment and 25 of 29 had a complete response (a total absence of measurable cancer). Durability is always an important factor to watch with CAR-T treatments, and in this case the CAR-T showed an 86% progression free survival (PFS) rate at 9 months. This data encourages us that BCMA may be the next frontier in CAR-T after B-cell malignancies.


MacroGenics (Nasdaq: MGNX)

We will have to see if MacroGenics becomes a commercial stage company later this year. It has submitted an application for approval to FDA for its first drug, Margetuximab. FDA’s target decision date is December 18th, 2020. This drug targets HER2 positives cancers and is designed so that its Fc domain (the stem of the antibody) has improved interaction with the immune system. In addition, the company has a full pipeline of other immunotherapy drugs. Its B7-H7 targeting drug recently showed some encouraging responses in prostate cancer. MacroGenics also has many bi-specific antibodies using its DART platform including ones that garget PD-1xLAG-3, PD-1xCTLA-4, and CD123xCD3.


Replimune (Nasdaq: REPL)

Replimune is the first oncolytic virus company to be added to the Cancer Immunotherapy ETF. Oncolytic viruses are injected directly into tumors. The way it works is that the virus replicates inside the tumor and causes it to break down and die. This releases antigens that teach the immune system to attack that kind of tumor. Replimune’s viruses are also given genetic codes for specific proteins that are meant to enhance cancer cell killing. One of the main ideas behind this approach is that it is uniquely tailored to each patient’s cancer. On June 3rd, Replimune presented an update from its phase 2 trial cohorts in melanoma and non-melanoma skin cancers that the company says support its registration-directed clinical trials with the lead oncolytic virus.


Trillium Therapeutics (Nasdaq: TRIL)

Trillium Therapeutics is a CD47 company. CD47 has been called the “don’t eat me” signal for the immune system. It is thought that a stronger immune response to cancer can be elicited by blocking it. This is immunotherapy in its purest form because it is designed to allow the immune system to do what it should naturally do with a cancer. Headlines were made earlier this year when Gilead acquired another CD47 company for $5.7 billion. Trillium has two SIRPαFc fusion proteins in its pipeline meant to block CD47. The only difference between them is which human immunoglobulin the CD47 blocking part is linked to via the Fc region. Both of the drugs are currently in phase 1 dose escalation studies.

Thank you for your interest in the field of immunotherapy and the Cancer Immunotherapy ETF. Be sure to sign up for email alerts below if you would like to receive notification of other news, company interviews, and research that we publish from time to time.

Opinions expressed are those of the author, interviewee, or Funds and are subject to change, are not intended to be a forecast of future events, a guarantee of future results, nor investment advice. Fund holdings and allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security. Astellas and Johnson & Johnson are not a holding of the fund or affiliated with the fund.

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