CAR-T stocks were all the rage back in 2017, catching investors' imaginations and inspiring new ways of thinking in oncology. The idea of gluing on an engineered receptor to an immune cell and using that to attack cancer was (and still is) exciting. But as of now, there are only two approved CAR-T therapies on the market. Both have underwhelmed sales estimates, and they are extremely expensive and dangerous.
Consequently, the excitement has died down. The space has been relatively quiet, especially since Big Pharma came in and acquired most of the players at the apex of CAR-T speculative fervor. Gilead (GILD) bought Kite Pharma nearly 2 years ago, and Celgene acquired Juno Therapeutics a few months later, which then got rolled up in Brisol Myers Squibb (BMY). One of the biggest independent CAR-T companies left standing is Bluebird Bio (BLUE), and it is gliding along 52-week lows.
Fortunately, this fascinating sector of biotech may see some renewed investor interest soon with Japanese pharma Takeda Pharmaceuticals (TAK, Financial) coming in to team up with the MD Anderson Cancer Center. The two are collaborating on a new branch of CAR science called CAR-NK. The concept is similar in terms of gluing specialized receptors onto immune cells, but this technique uses a different kind of immune cell called natural killer cells, or NKs, rather than T cells.
What’s the difference? First of all, NK cells do not proliferate in the body like T cells do. This means they cannot cause graft versus host disease, they do not have to be genetically matched donor to patient, and they won't cause toxic cytokine storm side effects, all of which are complications when CAR-T cells start proliferating and trigger an immune overreaction that can be fatal. This makes CAR-NK treatments a potentially off-the-shelf product, which would solve the problem of expensive and lengthy manufacturing costs and safety issues simultaneously. Both of these limitations are partly responsible for CAR-T’s limited reach into the market so far. Hopefully CAR-NK can to overcome these limitations.
The second difference is that NK cells do not need to be activated by an antigen like T cells do. When CAR-T cells are manufactured for a specific patient, a biopsy of that patient’s cancer is used in order to identify a target to affix. Without the target, the T-cell remains inactive. This gives cancer a potential way out of attack by T cells. If the cancer can change the antigens on its cell membranes, it can escape attack, which is often what ends up happening before the cancer is eradicated. Since NK cells do not require activation, cancer cells cannot escape them as easily.
There is one major disadvantage to CAR-NK, and it stems from the main advantage which is that they do not proliferate once administered in a patient. That means they do not circulate in the blood for very long, and can die out before a sufficient therapeutic affect has taken hold. MD Anderson believes that it has solved this problem. It first gets the cells from donated umbilical cord blood, and then adds IL-15 to the mix. This is a cytokine that naturally proliferates NK cells in a normal immune response. This causes more to be produced in vitro and also extends the lives of the cells once they are administered into a patient.
Clinical development is already far along, so we’re not talking 5 to 10 years out here. Takeda is aiming to start a pivotal clinical trial of CAR-NK in 2021. That should put an approval decision at around 2023 or so, assuming the are no clinical holds or other hiccups.
Takeda has been a struggling major pharma for 20 years. It has been trudging along though trading at long term support levels and pays a nice dividend for a healthcare stock at over 4.5%. No financial terms to the deal have been disclosed so far, but MD Anderson is a nonprofit. That being the case, even though it does make for-profit deals occasionally in order to fund its research, the deal was almost certainly nowhere near as expensive as Big Pharma’s multibillion dollar acquisitions of Kite Pharma and Juno Therapeutics two years ago. Keeping that in mind, this move looks like a pretty good risk/reward profile for Takeda overall.
Disclosure: No positions
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