“Supernatural killer” boosts our immune system to fight cancer.

In the regimen of immune system cells engineered to kill cancer, we currently master only T-cells. An even better option is engineering “natural killer (NK)” cells, and competition is heating up.

Bottom line

Nkarta emerged as a strong competitor to Fate Therapeutics a few days ago. By training a new subset of immune cells, both companies can achieve impressive results in one of the most aggressive forms of blood cancer. Other new entrants, like Cytovia, are also showing at the door of this juicy market. At atonra, we have been adding exposure to cell therapy in our portfolios, and the news flow keeps comforting us.

What happened

Nkarta touts a double win in 2 different cancers.

Nkarta is going against two severe blood cancer types: relapsed/refractory acute myeloid leukemia (AML) and relapsed/refractory B cell malignancies (lymphoma). The first one has no current standard of care; the second one has competition from chemotherapy and immunotherapy but also another subset of cell therapy: the engineer T-cell (CAR-T cell). Such a choice enables Nkarta to potentially prove it can be revolutionary in the first case and topple the standard of care in the second case.

Initial data released last week was compelling. A complete response (60%), meaning the absence of all detectable cancer after the treatment, was achieved in three of five patients who had heavily pretreated AML. Three of six patients treated for relapsed/refractory B cell malignancies showed a complete response (50%).

One must keep in mind that all those patients have failed at least two previous therapies, meaning they are facing very aggressive cancers. Therefore a 60% or 50% complete response is an impressive feat. As a result, the stock jumped 140%.

Impact on our Investment Case

Cell therapies: a fast-growing market that could grow even faster

Cell therapies are one of the fastest-growing segments in the biotechnology universe, expected to reach $70bn over the next five years at a 26% CAGR.

Cell therapies generally work by harvesting immune cells from a patient or a donor, proliferating them, introducing a genetic modification to make them more potent cancer killers, and reinjecting them in the patient.

Only six cell therapies have been approved since 2017, and all are T-cell-based. Four of them, developed by Gilead and Novartis, are for leukemia and lymphoma. The two others are focused on multiple myeloma: Bristol Myers Squibb's Abecma, approved in March 2021, and Legend's Carvykti, approved last February.

Already approved products saw strong revenue growth in 2021, with Novartis' Kymriah reaching $587mn (+24% YoY) and Gilead's Yescarta and Tecartus hitting $871mn (+43% YoY). Growth expectations for 2022 are similar.

Investors were mainly sensitive to the AML data

AML currently has no standard of care available. In other words, biopharma able to provide a cure will capture the entire market and have maximum pricing power.

As treatment price should be in the same ballpark as currently approved cell therapy for other cancers (~$400k per patient) and that ~20k patients are diagnosed in the U.S. with AML, the potential market is estimated at $8bn in yearly sales in the U.S. alone.

Expanding the market: additional modalities beyond T-cells

Engineered T-cells are a potent and well-validated therapy vector for anti-cancer treatments. However, cell therapies based on other immune cells could offer a better safety profile, an opportunity to re-dose, and (importantly) provide an alternative for patients not responding to T-cell-based therapies.

Last December, Fate Therapeutics reported positive results from their Phase 1 study for an off-the-shelf NK cell therapy targeted to patients with severe Non-Hodgkin Lymphoma. This is an early-stage study, but the positive patient outcomes (particularly in patients that were relapsing on other T-cell modalities) brought the spotlight on NK cell therapy and created an opportunity for SPACs like Cytovia or private companies like Glycostem to push their NK cell research in the clinics.

The FDA is also getting ready for more cell therapies

Field experts expect the agency to approve ~3 to 5 cell therapies per year by 2025, thanks to the companies currently trailblazing the field.

The FDA even released draft guidance in September 2021 on how sponsors that want to study multiple versions of cell and gene therapies could combine them in a single “umbrella” trial. Such guidance would accelerate innovative cancer cure research by shortening clinical trials thanks to reducing regulatory frictions and costs.

Our Takeaway

Cell therapies in clinical trials deliver impressive data, while those approved already show massive sales growth of >20% YoY.

We are positioning more and more our portfolio to capture the different cell therapies subsegments going beyond CAR-T cells.



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