Immutep investors spooked by LAG-3 failure in lung cancer

Friday the 13th has turned into a horror story for Australian biotech Immutep, whose share price collapsed after it abandoned a pivotal trial of its lead drug.

Immutep's ASX-listed stock fell more than 88% on the news that its phase 3 trial TACTI-004 of LAG-3 inhibitor eftilagimod alfa (efti) as a first-line treatment for non-small cell lung cancer (NSCLC) was being terminated on the advice of the independent data monitoring committee.

The Sydney-based immunotherapy developer was down in penny share territory after the revelation that it will implement an "orderly wind-down" of the trial, which was looking at the combination of efti with MSD's PD-1 inhibitor Keytruda (pembrolizumab) and chemotherapy.

Efti was pushed into phase 3 in NSCLC on the back of the mid-stage TACTI-002 study in patients with PD-L1-positive tumours, an open-label assessment of efti/Keytruda without chemo.

Two years ago, Immutep's stock price yo-yoed on readouts from the TACTI-003 study of efti/Keytruda as a first-line therapy for PD-L1-negative head and neck cancer, initially falling on what appeared to be modest efficacy, before recovering a few weeks later as additional data pointed to a stronger benefit.

Much more was riding on TACTI-004, however, as first-line treatment of NSCLC has been the main driver for sales of Keytruda for years, with potentially huge sales in the offing if efti was found to provide a significant improvement.

Partnering the drug has also been a contributor to Immutep's financial position. In December, for example, the company licensed commercial rights to efti in all countries outside North America, Europe, Japan, and Greater China to Dr Reddy's for $20 million upfront and around $350 million in potential milestone payments.

"We are very disappointed and surprised with the outcome of the futility analysis, in light of efti's performance in every other clinical trial," said Immutep's chief executive, Marc Voigt, who stressed that the biotech remains committed to its R&D pipeline, "including efti."

He added that the company is now conducting a "comprehensive review of the available data to better understand the results and determine the appropriate next steps for the programme."

Immutep ended 2025 with cash reserves of AUS$129 million (around US$92 million), which included the Dr Reddy's upfront payment and was reported at the time to be enough to fund operations into the second quarter of the 2027 financial year. With the demise of TACTI-004, it now expects those reserves to last considerably longer.

Efti is still in clinical trials involving several other indications, including head and neck cancer, breast cancer, and soft-tissue sarcoma, but the latest setback has undermined the programme, and possibly also sentiment toward LAG-3-targeting drugs more generally.

Bristol Myers Squibb has brought one drug in the class to market – Opdualag, which combined LAG-3 drug relatlimab with PD-1 inhibitor nivolumab – but the company has subsequently been plagued by a series of clinical trial failures and has been unable to extend the drug's label beyond its initial 2022 approval.

MSD was working on its own LAG-3 inhibitor, favezelimab, but abandoned the programme in 2024 after failed trials in lung and colorectal cancers. Meanwhile, Regeneron is running phase 2/3 studies of its LAG-3 candidate fianlimab in combination with its PD-1 inhibitor Libtayo (cemiplimab) in NSCLC and melanoma, and said in its annual results update that it is expecting a readout in the melanoma trial in the first half of this year.

Image by Peggy und Marco Lachmann-Anke from Pixabay