Chimeric antigen receptor T-cell (CAR-T) therapies and gene therapies are hot commodities these days. But some small biotechs developing CAR-T drugs and gene therapies are hotter than others.

Over the last 12 months, bluebird bio (NASDAQ:BLUE) stock has more than doubled. During the same period, Ziopharm Oncology's (NASDAQ:ZIOP) share price has tumbled over 30%. That's the past, though. Which of these two clinical-stage biotech stocks is the better pick for investors now? 

Cancer cell and DNA strand

Image source: Getty Images.

The case for Ziopharm 

The best argument for buying Ziopharm stock right now is the biotech's awkwardly named lead candidate, Ad-RTS-hIL-12. The gene-therapy product is an adenoviral vector -- a genetically engineered adenovirus designed to insert a gene into a cell. Ad-RTS-hIL-12 is administered through an injection into a tumor to cause a controlled expression of IL-12, a cell-signaling molecule that helps the immune system attack tumors.

Ziopharm hoped to initiate a pivotal phase 3 clinical study in the second half of 2018 evaluating Ad-RTS-hIL-12 in combination with small-molecule activator ligand veledimex in treating recurrent glioblastoma multiforme (rGBM), an aggressive form of brain cancer. However, the company announced on Thursday that it put those plans on hold while it resolves some technical manufacturing issues.

The gene therapy is a promising one. Ad-RTS-hIL-12 produced positive results in earlier clinical studies. In particular, Ziopharm reported that its lead candidate turned cold tumors hot. With hot tumors, the immune system remains engaged in attacking cancer cells even after a tumor is removed. That's not the case with cold tumors.

The biotech is also evaluating Ad-RTS-hIL-12 in phase 1 clinical studies targeting treatment of brain cancer. One of those studies combines Bristol-Myers Squibb's checkpoint inhibitor Opdivo with Ziopharma's gene therapy in treating rGBM. Another includes Ad-RTS-hIL-12 in combination with veledimex in treating brain tumors in pediatric patients.

Ziopharm is partnering with Intrexon, Merck KGaA, and MD Anderson Cancer Center on CAR-T and T-cell receptor (TCR) programs. Patient enrollment is in progress on a phase 1 study of one CAR-T therapy in treating acute myeloid leukemia (AML). The company expects two other phase 1 studies, one for a CAR-T therapy and the other for a TCR therapy, to begin in the second half of this year.

That early-stage CAR-T clinical trial should be of particular interest to investors. It will be Ziopharm's first clinical study evaluating a CAR-T that can be manufactured at the point of care. If successful, it holds the promise to significantly reduce the complexity and cost associated with current approved CAR-T therapies.

The case for Bluebird

Like Ziopharm, Bluebird is developing CAR-T programs, but its lead candidates are gene therapies. The biotech's most advanced product is LentiGlobin. The product works by inserting a functional human beta-globin gene into a patient's own hematopoietic stem cells (undifferentiated cells that develop into various types of blood cells) outside the body. These modified stem cells are then transplanted into the patient's bloodstream through infusion. 

Bluebird plans to submit LentiGlobin for approval in Europe in the second half of 2018 for treating patients with transfusion-dependent beta-thalassemia, a rare genetic blood disorder. The company is also evaluating LentiGlobin in a phase 1 study targeting treatment of severe sickle cell disease.

Lenti-D is another gene therapy in Bluebird's pipeline. Similar to LentiGlobin, Lenti-D involves insertion of a gene into a patient's stem cells and the transplanting of those stem cells back into the patient's bloodstream. Lenti-D, though, inserts a functioning copy of the ABCD1 gene and targets treatment of cerebral adrenoleukodystrophy (CALD), a rare genetic metabolic disorder. Bluebird is evaluating Lenti-D in a phase 1/2 study and plans to present results from the study later this year.

Celgene (NASDAQ:CELG) is co-developing Bluebird's lead CAR-T therapy, bb2121. The CAR-T immunotherapy a customized lentiviral vector to modify T cells so the T cells can recognize targeted proteins on the surface of cancer cells and attack them. Celgene plans to advance bb2121 to a phase 3 clinical study as a third-line treatment for multiple myeloma.

Better buy

Both of these biotechs have promising pipelines. But I think Bluebird is the better buy right now for three key reasons.

First, Bluebird is closer to potentially having a product on the market than Ziopharm is. If all goes well, Bluebird could launch LentiGlobin next year. It's uncertain when Ziopharm's pivotal study for Ad-RTS-hIL-12 will begin.

Second, I really like that Celgene has partnered with Bluebird. In March, the big biotech exercised its option to co-market bb2121 in the U.S. and exclusively market the CAR-T therapy outside of the U.S. That's a great stamp of approval from a major player in the industry.

Third, Bluebird is in better shape financially. In its first-quarter results, the biotech reported a cash stockpile of $1.57 billion. By comparison, Ziopharm had $51.1 million in cash and cash equivalents on hand at the end of the first quarter.

The biggest knock against Bluebird is that its market cap of nearly $9 billion already reflects high hopes for its pipeline. There are risks that the biotech's products could stumble in clinical trials or the regulatory approval process. Still, I think Bluebird's chances look pretty good. It's not the kind of stock you'd want to bet the farm on, because of the inherent risks with a clinical-stage biotech, but buying a small stake could pay off in a big way.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.