sanjeri/E+ via Getty Images
Allogene Therapeutics (NASDAQ:ALLO) is a great speculative biotech play to look into. The reason why I state that is because it has a large pipeline full of several CAR T therapies it is in development for. However, the most recent advancement that is quite promising deals with ALLO-316. I think that this product has huge potential because of its ability to go after CD70. As I will explain below, this is good, because it gives the biotech the flexibility to use it for both hematologic malignancies and solid tumors. It is also developed on the back of the AlloCAR T, which is a unique, innovative CAR-T therapy technology platform that harvests donor T-cells from healthy donors. In other words, an off-the-shelf CAR T that has multiple advantages. Recently, ALLO-316 was given Fast Track Designation from the FDA for the treatment of patients with renal cell carcinoma. It has already established a partnership for several therapeutics candidates with Cellectis (CLLS) back in 2019. Based on the latest advancement and a diversified CAR T pipeline, these are the reasons why I believe that Allogene Therapeutics is a great speculative biotech to look into.
ALLO-316 For Treatment Of Patients With Renal Cell Carcinoma
The first program to go over involves the use of ALLO-316, which is being developed for the treatment of patients with renal cell carcinoma. Renal Cell Carcinoma (RCC), which is also known as kidney cancer, occurs in the lining of the tubules in the kidney. These tubules are very important, because they are responsible for filtering out and cleaning blood in the body. There are a few symptoms which may give notice of whether or not someone might have RCC and they are:
- Blood in urine
- Lump in abdomen
- Pain in lower back areas
Some risk factors for those who might get this type of cancer are those who smoke and are obese. This is a good first indication for Allogene, because the kidney cancer market is huge. It is expected that the global kidney cancer market could reach $9.4 billion by 2026. What makes ALLO-316 and several other drugs in the pipeline so important goes back to what I noted above about the use of the AlloCAR T technology platform. It is the ability to use ALLO-316 as an allogeneic CAR T (meaning being able to harvest T-cells from healthy donors), whereas in the past, older CAR-Ts required the harvesting of T-cells from the patients themselves. Most recently, the FDA granted ALLO-316 with Fast Track Designation for patients with advanced kidney cancer. Why Fast Track Designation? I think it largely was given because of the huge unmet medical need for this patient population. This status is given by the FDA to bring about new treatment options for patients who have few options if at all. Secondly, I believe it’s all about the numbers for this unmet medical need. Despite some standard of care (SOC) therapies for these patients, survival is abysmal. Consider that the 5-year survival rate for patients with advanced kidney cancer is less than 15%.
Where does ALLO-316 fit into the equation? Well, the main target for this specific CAR-T is CD70. I believe that CD70 is becoming a highly sought-out protein to target for treatment of cancers. Where ALLO-316 fits is that CD70 is highly expressed in RCC but, on the flip side, is limited in terms of expression in normal tissue. This means the CAR-T can have the potential to have a large impact on likely helping this patient population, while at the same time remaining relatively safe. This is not the only advantage for going after CD70. Another advantage is that Allogene can go after both hematologic malignancies (blood cancer) and solid tumors. This would open the door for many other indications as well. For example, CD70 is selectively expressed in several other types of solid tumors. Such tumor expressions of CD70 are:
- 71% diffuse large b-cell lymphoma (DLBCL)
- 63% multiple myeloma (MM)
- 30% non-small cell lung cancer (NSCLC)
- 40% cervical cancer
- 50% ovarian cancer
As you can see, there are many other possible cancer targets that it can go after in the future. This flexibility could potentially become a huge advantage in my opinion. Of course, that’s if the results from an ongoing study make the case for using a CAR-T such as ALLO-316 that targets CD70.
The use of ALLO-316 is being explored in the phase 1 TRAVERSE study, which is treating patients with advanced or metastatic clear cell RCC. This trial is expected to recruit up to 120 patients who will receive ALLO-316 therapy. The goal is to test safety and efficacy for this patient population. One past roadblock that Allogene suffered was a clinical hold that took place on October 7, 2021. The reason for the clinical hold was that there was a report of a chromosomal abnormality detected after a patient had received AlloCAR T administration. This was a patient who was given ALLO-501A in the ALPHA 2 study treating patients with non-Hodgkin’s lymphoma (NHL). The good news is that this problem was dealt with, because the FDA lifted the clinical hold for all of Allogene’s CAR T programs. This is because no problem was detected either with TALEN technology or AlloCAR T. What is TALEN? TALEN is a technology from Cellectis, which can be used to precisely edit genes. As I noted above, back in 2019, both Allogene and Cellectis formed a partnership to advance several CAR-Ts. Therefore, ALLO-316 utilizes both of these technologies. What makes the CAR-T pipeline from Allogene so great is that it even has a lymphodepletion agent of its own it is developing, which is known as ALLO-647. It is an anti-CD52 monoclonal antibody that is being incorporated with other CAR-Ts in order to allow the expansion and persistence of them for a longer period of time.
Financials
According to the 10-K SEC Filing, Allogene Therapeutics had cash, cash equivalents, and investments of $810 million as of December 31, 2021. A big reason for the cash on hand was a large cash raise it did back in June of 2020. That is when it sold a total of 13,457,447 shares of its common stock at a price of $47 per share. The underwriters also exercised their option for an additional 1,755,319 shares of common stock at the very same price. It raised a total of approximately $632.5 million during this financing event. It believes that its current cash on hand will be enough to fund its operations for at least the next 12 months from the date of the issuance of the 10-K SEC filing which occurred on February 23, 2022. I believe that it will not wait until the very end to raise cash, as such it could likely raise cash again by mid-2022. My guess is that it will likely do so after a major catalyst event takes place. A major catalyst to occur around mid-2022 would be the initiation of the pivotal ALPHA2 study, which is using ALLO-501A for the treatment of patients with NHL.
Risks To Business
There are several risks that investors should be aware of before placing a bet in this speculative biotech. The first and most crucial risk would be data from the ongoing phase 1 TRAVERSE study, which is using ALLO-316 for the treatment of patients with RCC. That’s because it is unknown whether or not this CAR T ends up being safe/tolerable for this patient population. Secondly, it will be important to see efficacy with the use of this treatment; especially, since the ALLO-647 lymphodepletion agent is being incorporated into this study for possible T-cell expansion and persistence. The second risk involves the financials. As I stated above, I believe it will need to raise cash again by mid-2022. I think it could happen around that time, or upon another major press release announcement. The final risk involves the safety problem it had. While such a safety issue wasn’t noted by TALEN or AlloCAR T platform, it doesn’t rule out the possibility for another possible hold in the future.
Conclusion
Allogene Therapeutics is a great speculative biotech play to look into. Besides ALLO-316 for hematologic malignancies and solid tumors, it has several other CAR Ts as well. I discussed ALLO-501A which is being used to target CD19 in patients with NHL. However, it also has so many other studies. For instance, it has ALLO-715 CAR T for patients with multiple myeloma. In one study, it is being explored with ALLO-715 alone, and then in another study in combination with nirogacestat. Nirogacestat is a gamma secretase inhibitor drug from SpringWorks Therapeutics (SWTX). It even has another advanced CAR T known as ALLO-605 which is also being used for the treatment of patients with multiple myeloma. However, this CAR T is far more unique because it uses the company’s TurboCAR technology. This is a type of technology that allows selective engineering of cytokine activation in CAR T cells. What does this accomplish? Potential to increase potency and persistence of allogeneic cells. In essence, to hopefully allow CAR T to work for an extended period of time in the body. This has only been shown in preclinical models, but the hope is that it can also be proven in humans. An update on the BCMA program from this biotech is expected by the end of 2022. With so much potential, plus many other CAR Ts in the pipeline, these are the reasons why I believe Allogene is a great speculative biotech play to look into.
Be the first to comment