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Better Buy: Agenus Inc. vs. Bellicum Pharmaceuticals Inc.

By Keith Speights – Oct 18, 2016 at 9:42AM

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Which of these clinical-stage biotechs is the better pick for investors right now?

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It's been a good year for clinical-stage biotech Agenus Inc. (AGEN -6.75%): Its shares are up over 20% in 2016. Meanwhile, shares of peer Bellicum Pharmaceuticals (BLCM -8.52%) have sunk more than 20%. Which of these two biotech stocks presents the better choice for investors now?

The case for Agenus

Why buy Agenus stock? One top reason would be the company's promising QS-21 Stimulon adjuvant, used in vaccines to strengthen immune response. GlaxoSmithKline (GSK -0.43%) is using the adjuvant as a key component in its malaria and shingles vaccines.

Glaxo's malaria vaccine, Mosquirix, has experienced ups and downs. It received a positive opinion from European regulators in 2015. However, the World Health Organization is requiring additional pilot programs before expanding use of the vaccine.

While Mosquirix's efficacy decreases over time, that doesn't seem to be a problem for Glaxo's shingles vaccine, Shingrix. The big drugmaker expects to file for regulatory approval before the end of 2016. That's good news for Agenus, which has already monetized part of the royalties it hopes to receive from Glaxo's vaccines through a note purchase agreement.

Agenus also has its own vaccines in development. Prophage successfully completed a couple of phase 2 clinical studies for newly diagnosed and recurring glioblastoma multiforme. Agenus hopes to have another study of Prophage begin by the end of 2016, but this study won't be sponsored by the biotech. Two other cancer vaccines, AutoSynVax and PhosphoSynVax, are in preclinical testing. 

Then there's Agenus' checkpoint antibody program. The company launched a phase 1 study of AGEN1884 earlier this year. Agenus is working with Incyte on another phase 1/2 study of experimental cancer treatment INCAGN1876. Also, in June Merck selected its lead product candidate from Agenus' antibody roster to advance into preclinical testing.

Agenus reported cash, cash equivalents, and short-term investments of $123.3 million at the end of June. That's only enough to carry the biotech through the first half of 2017. Further dilution of shares through another stock offering seems quite likely. 

The case for Bellicum

Lead candidate BPX-501 stands as the main reason for investors to like Bellicum. The adjunct T-cell therapy is in two pivotal clinical studies targeting pediatric leukemias, lymphomas, and rare inherited blood diseases.

BPX-501 could address a critical issue with hematopoietic stem cell transplantation (HSCT), the transplantation of stem cells from bone marrow or blood. While HCST is the standard of care for treating several blood diseases, it's not a viable option for many patients, because they don't have a fully matched donor. BPX-501 helps make partial match donor (haploidentical) transplants more likely to be successful. 

Bellicum has received orphan drug designation for BPX-501 in both the U.S. and Europe. The biotech hopes to be able to submit for European approval of the drug based on its ongoing phase 1/2 clinical study under the European Union's "exceptional circumstances" provision. This provision allows for early approval for drugs that treat rare diseases or where controlled studies aren't a practical option.

The company also has a couple of other candidates in its pipeline. BPX-601 is being evaluated in a phase 1 clinical trial for treating non-resectable pancreatic cancer. Another drug, BPX-701, will soon be evaluated in a phase 1 clinical study focusing on initial indications of refractory or relapsed acute myeloid leukemia and myelodysplastic syndromes.

Bellicum reported cash, cash equivalents, and investment securities of $136.6 million at the end of June. The biotech thinks that should be enough to fund development and operations through the end of 2017.

Better buy

It's a tough pick between these two clinical-stage biotechs. Both have opportunities, but both also have significant risks. 

Shingrix should be a big winner for Glaxo and Agenus. If Glaxo's results with Mosquirix were more positive, I'd probably give the nod to Agenus. 

Instead, my pick is Bellicum. The company owns all rights to its drugs, which is a big plus. If all goes well with BPX-501, Bellicum could be quite successful. I also wouldn't be surprised if the biotech ended up as an acquisition target down the road. Bellicum looks like the better buy right now.

Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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