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Caribou Biosciences (NASDAQ:CRBU), founded by CRISPR pioneer Jennifer Doudna, is another CAR-T stock that has been down for months on end. Since my last coverage almost exactly a year ago, the stock is down 50%. Not a lot has happened with the company since then – which is one of the many reasons this stock is a laggard.
Last year, we saw how the clinical hold on Allogene (ALLO) caused CRBU stock to falter. In October last year, the FDA placed a clinical hold on all 5 programs of Allogene following a report of a chromosomal abnormality in ALLO-501A CAR T cells in a patient treated in the ALPHA2 study. Per the company:
The single case involves a patient with Stage IV transformed follicular lymphoma and c-myc rearrangement whose cancer was refractory to two prior lines of immune-chemotherapy and additional radiation therapy. The patient could not receive an autologous CD19 CAR T cell therapy due to manufacturing failure associated with inadequate expansion of autologous CAR T cells.
Following infusion of ALLO-501A, the patient experienced Grade 1 CRS and Grade 2 ICANS, which required a course of high dose steroid therapy. The patient subsequently developed progressive pancytopenia and a bone marrow biopsy showed aplastic anemia and the presence of ALLO-501A CAR T cells with the chromosomal abnormality. Early translational data showed that the CAR T cells expanded, peaking on Day 28, and undergoing contraction thereafter. The patient had a partial response to ALLO-501A and subsequently underwent allogeneic stem cell transplantation. Prolonged cytopenia requiring rescue stem cell transplantation has been reported in autologous CAR T therapies.
This has a direct bearing on Caribou. While it uses a different gene editing technology from Allogene – chRDNA, a type of Crispr, versus the latter’s TALEN, an older but more precise technology – there are enough similarities to warrant caution. The main concern is the TRAC (T Cell Receptor Alpha Constant) edit, which occurs under both programs, and which caused the pancytopenia in the Allogene patient. Even though the tech is different, these are the same edits.
In January, the FDA lifted the clinical hold for Allogene, and the collective gene editing space heaved a sigh of relief. What they said:
Investigations concluded that the chromosomal abnormality was unrelated to TALEN® gene editing or Allogene’s manufacturing process and had no clinical significance. The abnormality was not detected in any manufactured AlloCAR T product or in any other patient treated with the same ALLO-501A lot. The abnormality occurred in the patient after the cell product was administered. It involved regions of the T cell receptor and immunoglobulin genes known to undergo rearrangement as part of the T cell or B cell maturation process.
I believe the FDA let it slide because there was just this one patient. Otherwise, there would have been further investigation – unrelated or not.
In May, Caribou posted early data from the lowest dose cohort of lead candidate CB-010 in a phase 1 trial in penta- or more refractory NHL patients, and there was a strong drug response seen in patients, with all 5 of the 5 patients showing an overall response rate of 100%, while 80% of patients had no detectable evidence of cancer, i.e., they had a CR or complete response. The data was so good that the stock went up 30% despite some nagging safety issues – specifically, Grade 3 or 4 treatment emergent adverse events (TEAEs) developed in 5 of 6 patients.
However, in June, at the EHA, when the company produced durability data, the stock went down. It was seen that while 5 patients (updated to 6 evaluable patients from the May data drop) achieved a CR initially, only 2 remained in CR after 6 months, and only after 12 months. Durability has been a problem with these expensive CAR-T therapies, with such issues seen in trials from Allogene, Crispr Therapeutics and Precision Biosciences. Bulls note that there were not major safety issues leading to discontinuations, no cytokine storm or graft versus host issues, so the company can move on to the next higher dose cohort, which is twice the first dose. That should be able to improve durability, say the bulls.
On the positive side, according to Fierce:
To put these early—and yes, very limited—results into perspective, Haurwitz [Caribou CEO Rachel Haurwitz, Ph.D.] says that the approved CAR-Ts that focus on CD19-positive disease have achieved overall response rates of about 50% to 70% and overall response rates of 30% to 50%. These include Gilead’s Yescarta, Bristol Myers Squibb’s Breyanzi and Novartis’ Kymriah.
Financials
CRBU has a market cap of $618mn and a cash reserve of $366.1 million in cash, cash equivalents, and marketable securities. Research and development expenses were $22.6 million for the three months ended June 30, 2022, while general and administrative expenses were $10.0 million. At that rate, the company has a cash runway well into 10 quarters, even considering the short-term investments.
The company has a major partnership with AbbVie (ABBV) for CAR-T therapies for which the company paid them $40mn upfront and $300mn in promised funds for certain milestones.
Bottom line
CRBU is as promising as CART therapies go. If the second dose cohort produces good durability data and easy safety data, this stock will see major momentum. As such, dips are buys.
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