Adaptimmune: Underappreciated Biotech With BLA Filing Q4 Of 2022 (NASDAQ:ADAP)

Adaptimmune Therapeutics plc (NASDAQ:ADAP) is a great speculative biotech play to look into. That’s because it had already established proof of concept in using its treatment afami-cel for the treatment of patients with Synovial Sarcoma and Myxoid/Round Cell Liposarcoma (MRCLS). The biotech announced last year that the SPEARHEAD-1 study using this treatment for this patient population had met the primary endpoint. With that said, the biotech is on track to file a Biologics Licensing Application (BLA) by Q4 of 2022. If all goes well with the FDA review process, plus eventual approval, the treatment will be marketed in 2023. Much more than just obtaining possible FDA approval, afami-cel makes the case that the SPEAR T-cell platform technology may be useful in targeting other types of solid tumors. The company engineers T-cells to target and destroy cancer across multiple types of solid tumors.

Afami-cel For The Treatment Of Patients With Synovial Sarcoma And Myxoid/Round Cell Liposarcoma

Afami-cel is being developed for the treatment of patients with Synovial Sarcoma and Myxoid/Round Cell Liposarcoma (MRCLS). The thing is that both of these indications are known as soft tissue sarcomas. The cancer starts to form in the soft tissue that connects and supports other body parts like the muscle, fat, nerves and tendons of the body. It is not a massive population, though, because in the United States it is said that there are about 13,000 people who will be diagnosed with a type of soft tissue sarcoma in 2021. The only thing is that there are several types, as follows:

• Synovial sarcoma
• Liposarcoma
• Angiosarcoma
• Rhabdomyosarcoma
• Malignant fibrous histiocytoma

In order for the biotech to test out its drug afami-cel (formerly known as ADP-A2M4), it had to initiate a phase 2 study known as SPEARHEAD-1. This was a phase 2 study that had recruited a total of 37 patients who had received treatment with afami-cel. The endpoints of the study looked at what you would typically see with cancer drug companies. They were:

• Overall response rate (ORR)
• Disease Control Rate (DCR)
• Duration of Response (DOR)

The overall response rate, which deals with the primary endpoint was 34%. Which translates to 16 out of 47 patients who achieved a partial response with afami-cel treatment. The breakdown of the ORR was:

• 36% ORR for patients with synovial sarcoma
• 25% ORR for patients with MRCLS

What makes Adaptimmune’s cell therapy afami-cel so great is that after patients first receive lymphodepletion, the treatment from the company continues to work after only one dose given. What do I mean by this? Patients are not forced to come back every 2 to 3 weeks to receive an infusion. Also, they are not required to have to take daily oral pills. Afami-cel is a once infusion cell therapy whereby T-cells continue to work to attack and kill the cancer. The patient receives one dose of chemotherapy and then only needs one infusion of afami-cel. The modified T-cells from the therapy continue to work on their own. Newly updated data was released about a month ago. This was pooled data from both cohort 1 of the SPEARHEAD-1 study and a prior phase 1 study, whereby 69 patients with synovial sarcoma or MRCLS were treated with afami-cel. Final results with this pooled data from both studies showed that the overall response rate was 36% in heavily pre-treated patients across both types of sarcomas, with a median duration of response (DOR) of 52 weeks. The data which is to be used for the BLA filing expected in Q4 of 2022 for afami-cel will just be that dealing with the SPEARHEAD-1 study.

Financials

According to the 10-Q SEC Filing, Adaptimmune Therapeutics had $89.5 million of cash and cash equivalents and Total Liquidity of $304.2 million as of March 31, 2022. A big reason for the large influx of cash was the partnerships that it had achieved over the years. The most recent partnership was done with Roche (OTCQX:RHHBY) subsidiary Genentech whereby Adaptimmune received an upfront payment of $150 million. It is eligible to earn up to $150 million over the next 5 years as additional payments, plus potential development, regulatory, and commercial milestone payments exceeding $3 billion in aggregate value. All this, plus typical royalties on net sales should any drug detailing with this partnership reach the market. It believes it has enough cash on hand to fund its operations into early 2024. It has enough cash for the time being and I wouldn’t expect the need to raise any additional funds until mid-2023 at the earliest.

Risk To Business

There are several risks that investors should be aware of before investing in this biotech. The first major risk is that Adaptimmune is just only filing the BLA in Q4 of 2022. There is no guarantee that the FDA will accept the filing in its current status. Even if the FDA accepts the BLA filing of afami-cel, there is no guarantee that the company will receive regulatory approval upon review. A second risk would be with respect to the partnerships it has, especially with Genentech. The $3 billion in potential milestone payments are only possible if several of the programs reach past clinical development, regulatory review and marketing. It is also possible that should multiple therapies not reach their potential, then Genentech could possibly have the option of terminating the partnership entirely. As it relates to the financial risk in place, there is no need for investors to worry for the time being. However, by mid-2023, I believe that Adaptimmune may start having to look for ways to raise cash.

Conclusion

I believe that Adaptimmune Therapeutics is a great speculative biotech play to look into. The reason why is because it had established proof of concept in using its treatment afami-cel for the treatment of patients with synovial sarcoma and MRCLS. This bodes well for the use of its SPEAR T-cell platform technology in targeting other types of solid tumors. Not only that, but it is ready to file its BLA for afami-cel for these patients in Q4 of 2022. This provides a major catalyst for traders/investors to look forward to. Should the BLA Filing be accepted for afami-cel, plus FDA approval occurring, the treatment should be marketed in 2023. Based on a proven platform technology, plus potential for regulatory approval of afami-cel, I believe that Adaptimmune Therapeutics is a great speculative biotech play to look into.