Juno Therapeutics' (NASDAQ:JUNO) CAR-T cancer research program has been recently plagued by safety concerns, and that could give other companies working on CAR-T therapies an edge. Can Kite Pharma (NASDAQ: KITE) and Bellicum Pharmaceuticals (NASDAQ:BLCM) sidestep the risks that temporarily halted Juno Therapeutics' JCAR015 study?
In this clip from The Motley Fool's Industry Focus: Healthcare podcast, analyst Kristine Harjes and contributor Todd Campbell highlight why they think these two companies may be a better buy than Juno Therapeutics.
A transcript follows the video.
This podcast was recorded on July 19, 2016.
Kristine Harjes: The stock is still down pretty substantially from before this news came out at all. What do you think, good buying opportunity?
Todd Campbell: [laughs] For risk-tolerant investors, yes. With the caveat I actually prefer another CAR-T developer more; that's Kite Pharmaceuticals. The symbol there is KITE.
Harjes: That's not the one I thought you were going to say. I'll pitch a different one when you're done with Kite.
Campbell: All right. The reason I like Kite is they're also working on CAR-T therapy, they do use flu in their preconditioning regimen, which is a little bit worrisome, but they haven't reported any deaths. The dosing they use of this flu [...] preconditioning regimen is far smaller doses of these chemotherapy agents. We'll assume at this point that they have achieved a Goldilocks situation; they figured out with the right combination is in the dosing of it. We're going to get results from a trial in diffuse large B cell cancer later this year. If those results are good, they plan on filing for FDA approval before the end of 2016. Conceivably, that could allow for this drug to hit the market and begin generating out revenue for investors next year.
Juno had anticipated also delivering its JCAR 015 to market as early as next year. But even with a delay, and now they're going to have to get these patients treated with just the one chemotherapy agent, we may not see that drug, JCAR 015, until 2018. I think that's why you're saying the shares still trading down a little bit from where they were, even though the trial halt lifted pretty quickly.
Harjes: Makes sense. And I think Kite's shares actually took a pretty big hit when this news came out, because they're working on fairly similar therapies.
Campbell: Right. They're using flu in their preconditioning cocktail.
Harjes: That's a huge part of it.
Campbell: I think that made people a little bit nervous. Could we see a surprise from them prior to the data? We haven't seen that yet, though.
Harjes: I promised I would do a quick pitch on another option, if you're interested in the CAR-T space. This one's called Bellicum. It's a little bit of a dark horse. Its way smaller than the other two. Kite has a market cap of around $2.5 billion, Juno has $3 billion. Bellicum is tiny; it's $367 million. But one of the big issues that's going on right now with CAR-T is safety. It's something we just saw with Juno, and something that has been following these CAR-T drugs, their entire existence. Bellicum thinks it's found the answer to this safety dilemma. It has its own proprietary technology call CID, which basically created this molecular switching platform. What that means is, they think they've found a way to turn these T cells on or off. That way, if you get a patient that is suddenly showing signs of these bad after effects of CAR-T treatments -- neurotoxicities, cytokine release syndrome -- you can just switch them off.
It's a really intriguing idea, and it's still early and development. But I would be shocked, actually, if one of these other two, Juno or Kite, didn't have their eyes on Bellicum.
Campbell: I don't know how that will play out to. I haven't spent a lot of time with that stock. I'm going to leave investors to do their own research on it. I'd be very curious to see what kind of partnerships, if any, they've instituted so far. I'd also like to know what they have for cash kicking around on their balance sheet for their runway. But yeah, this whole space is very intriguing, it's very fast-moving, and a lot is going to be coming out over the course of the next year. Trial data, potential safety risk, all sorts of crazy information.