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I covered Arcellx (NASDAQ:ACLX) at its IPO in January. Arcellx is a clinical stage biopharma developing cancer immunotherapies. It has a novel D-Domain technology that makes traditional cell therapies like CAR-Ts safer and more efficacious. Recent ASCO data showed that its “more traditional” CAR-T candidate still bested Johnson & Johnson and Legend Biotech, including the former’s Carvykti, an approved product.
“Pretty much any way you slice the updated data, CART-ddBCMA’s efficacy outcomes are in line with the class leader, cilta-cel (Carvykti)-best response, [minimal residual disease] negativity, and measures of durability,” SVB Securities wrote, according to Fierce. The patient population was arguably more difficult to treat, with a high rate of extramedullary involvement, and unlike Carvykti, which has a black box warning for cytokine release syndrome, ACLX seemed safer.
ACLX’ D-Domains are used in chimeric antigen receptor (CAR) constructs, and result in “higher transduction efficiency, high cell surface expression, and low tonic signaling.” The first two points relate to the molecule’s improvement of CAR-T efficacy and the last to its increased safety.
Transduction is the viral ability to transfer genetic material; cell surface expression of CAR-Ts are enhanced through the simpler structures of the D-Domain; and tonic signaling refers to activation of T cells, which may cause unwanted immune feedback. Arcellx has these D-Domains that are small, fully synthetic, hydrophobic and stable binding agents, unlike traditional binders that are biologic, single-chain variable fragment (scFv) binding CAR T cells that have narrow applicability and high toxicity. These D-Domains can be produced in large batches with great consistency and tailored to each cancer situation.
The company is quite early stage, with only preliminary data available from one of its two ongoing phase 1 trials. This is the company’s first product candidate, CART-ddBCMA. It targets the B-cell maturation antigen (BCMA), and is being evaluated in a Phase 1 proof-of-concept study “iMMagine” for relapsed or refractory (r/r) multiple myeloma (MM) in patients with either minimal response or disease progression within 60 days of last treatment. The study “demonstrated 100% overall response rate and deep durability.” The company plans to jump directly to a pivotal study next year. Prelim data has shown good safety, with only one grade 3 CR and a decent toxicity profile. The data compares very favorably to two other CAR-T programs, LEGEND-2, and CERTITUDE-1 from JNJ. Their data is available here. You will note that sample sizes were not widely divergent in strength, yet ACLX did a marginally better job with both ORR and CR.
Its other assets are all earlier, preclinical stage product candidates.
Among scores of CAR-T companies and probably hundreds of cell therapy companies, what makes newbie Arcellx stand out? According to the company, they have the first “controllable CAR-T” in the clinic. This is the asset where they dosed the first patient this year. According to the company, this has “a linking protein that would enable physicians to control the dose and frequency of CAR-T cell therapy after it’s been administered.” Already its first trial with data from a more traditional CAR-T has beat the “class-leader” in BCMA-targeted therapy, Janssen’s cilta-cel. These are among some of the reasons ACLX is upbeat despite a late entry. This, and the huge demand for life-changing CAR-T therapies that’s in the market right now.
How does the controllable technology work? CART is a highly efficacious treatment with great benefit, however the disease relapses as the cancer mutates. Arcellx has a two-part therapy called SparX which latch on to cancer cells and draws the CAR-T to that cell. If the cancer mutates, Arcellx simply needs to infuse the patient with a new batch of these SparX proteins, and they will latch on to the mutated cancer cell, drawing the CAR-Ts to them once again.
Thus, while data from the traditional CAR-T they released is good, their core USP is with the SparX technology, which will have data next year.
Financials
ACLX has a market cap of $841mn and a cash reserve of $307mn. Research and development expenses were $23.4 million, while general and administrative expenses were $9.2 million. That gives them a cash runway of almost 10 quarters at current rates.
Bottomline
ACLX is an interesting company. It has an uphill battle against bigger and earlier competitors, and while it has outstanding data, the bar is really quite high. Its next-gen CART is its key product, so we will wait and see how things go with that product candidate before we take a call.
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