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Gilead Drug Approval Fuels Interest in CAR-T Space: 3 Stocks to Consider

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Interest in the CAR-T (chimeric antigen receptor T cells) space continues to build up with the FDA giving its nod to the second CAR-T therapy last week. Gilead Sciences’s (GILD - Free Report) Yescarta, a cell-based gene therapy, gained approval for the treatment of adult patients with certain types of large B-cell lymphoma who have not responded to or who have relapsed after at least two other kinds of treatment. This makes Yescarta the second gene therapy to gain FDA approval, the first being Novartis AG’s (NVS - Free Report) Kymriah. Kymriah was approved in late August 2017 for certain pediatric and young adult patients with a form of acute lymphoblastic leukemia (“ALL”).

How Does CAR-T Cell Therapy Work?

CAR-T falls under the ambit of cellular immunotherapy which involves using a patient’s own immune cells to attack and get rid of harmful disease cells in the body.

The CAR-T approach involves the collection of a patient’s T cells, their genetic modification outside the body, the incorporation of specific receptors which target cancer cells and finally, the re-infusion of the modified T cells back into the patient.

There is a lot of enthusiasm for CAR-T as studies have shown that it can help achieve durable complete responses in some leukemias and lymphomas, including in patients who have suffered multiple relapses. However, CAR-T comes with its own set of challenges including a high level of R&D investment as well as safety issues like serious immune toxicity (“CRS”) or neurotoxicity. In fact, both Kymriah and Yescarta have boxed warnings in their labels for CRS and neurologic toxicities. These treatments will also not come cheap. While Novartis has set a price of $475,000 for Kymriah, the list price for Gilead’s Yescarta is $373,000.

The FDA’s Stance

With the FDA granting back-to-back approvals to two CAR-T treatments, it looks like the regulatory environment might well be encouraging for gene cell therapy candidates.  

In fact, FDA Commissioner Scott Gottlieb said that the approval of Yescarta shows the continued momentum in this promising new area of medicine. The agency intends to release a comprehensive policy on how it plans to support the development of cell-based regenerative medicine.

CAR-T Stocks in Focus

Given the increased focus on this corner of the immuno-oncology market and the huge commercial potential for approved treatments in this market, here is a look at 3 companies that are working on CAR-T cell treatments.

Juno Therapeutics, Inc. : Biopharmaceutical company, Juno, is focused on the development of innovative cellular immunotherapies for the treatment of cancer. Juno’s cell-based cancer immunotherapies are based on chimeric antigen receptor and high-affinity T cell receptor technologies. The company has several cell-based candidates in its pipeline targeting a variety of B-cell malignancies as well as multiple solid tumors and multiple myeloma.

Although the company suffered a major setback with the development of its erstwhile lead pipeline candidate due to safety issues (including patient deaths), Juno is now focusing on JCAR017, a next-generation CAR-T cell product that targets CD19. JCAR017 is currently in a registrational study for non-Hodgkin’s lymphoma ("NHL"). The company also has a strong partner in Celgene Corporation .

Juno stock has gained 131.9% year to date, substantially outperforming the 10.2% rally of the industry it belongs to.

bluebird bio, Inc. (BLUE - Free Report) : bluebird is another clinical-stage company working on developing gene therapies for serious genetic diseases and T cell-based immunotherapies for cancer. The company’s anti-BCMA CAR T therapy, bb21217, is being evaluated for relapsed/refractory multiple myeloma. bb21217 as well as bb2121 are being developed in collaboration with Celgene.

bluebird stock has gained 131% year to date, substantially outperforming the 10.2% rally of the industry it belongs to.

ZIOPHARM Oncology, Inc. : Biotech company ZIOPHARM uses innovative gene expression, control and cell technologies to provide safe, effective and scalable cell- and viral-based therapies for cancer and graft-versus-host-disease. ZIOPHARM’s immune-oncology platform includes CAR-T as well as other adoptive cell-based approaches.

While announcing second quarter results, the company had said that within its CAR+ T programs, it is continuing with a phase I second generation study of CD19 specific CAR+ T for lymphoid malignancies and expects to move third generation CD19 with mbIL15 towards an early-stage study evaluating point-of-care. Plans are also on to commence a phase I study with CD33-specific CAR+ T for relapsed/refractory acute myeloid leukemia (AML) this year. ZIOPHARM’s shares are up 0.9% so far in 2017.

Juno, bluebird and ZIOPHARM are all Zacks Rank #3 (Hold) stocks - you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In addition to the above three, companies like Bellicum Pharmaceuticals, Inc. and Cellectis also have a presence in this area. However, Cellectis, a French  biopharmaceutical company focused on developing immunotherapies based on gene-edited allogeneic CAR T-cells (UCART), has run into a roadblock with the FDA placing a clinical hold on a couple of early-stage studies being conducted on UCART123. The hold came into place after the company reported a death in one of the studies.

Going forward, we expect investor focus to remain in this corner of the immuno-oncology market. In addition to tracking the performance of Kymriah and Yescarta, we believe more deals will be announced in the cell therapy space.

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