Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Allogene Therapeutics Is Roaring Higher Today

By Maxx Chatsko - May 14, 2020 at 1:06PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The development-stage biopharma reported encouraging, albeit early, data from an important pipeline program.

What happened

Shares of Allogene Therapeutics (ALLO -1.88%) gained over 33% in early trading Thursday after the company reported preliminary data from a phase 1 clinical trial. The results will be featured in an abstract to be presented at the American Society of Clinical Oncology (ASCO) meeting at the end of May. 

The phase 1 trial is evaluating a combination of cell therapy drug candidate ALLO-501 and monoclonal antibody drug candidate ALLO-647 to treat advanced non-Hodgkin lymphoma (NHL). Investors are excited by preliminary results suggesting the drug combo could become a powerful treatment option. 

As of 12:42 p.m. EDT, the pharma stock had settled to a 30.2% gain.

A woman sitting with her laptop and pumping her fist in excitement.

Image source: Getty Images.

So what

Allogene Therapeutics is developing a pipeline of allogeneic CAR-T cell therapies to treat cancer. Unlike first-generation cell CAR-T therapies, allogeneic cell therapies are derived from donors or cell lines, which allows them to be manufactured at significantly lower cost and larger scale. 

For the phase 1 study in the news today, ALLO-501 is an allogeneic cell therapy designed to target blood cancer cells, while ALLO-647 is a monoclonal antibody that depletes lymphocytes to prepare a patient's body for CAR-T treatment.

The ASCO abstract from Allogene Therapeutics showcases results from a dose escalation study, which means researchers are administering the experimental combination therapy at different doses to determine the optimal balance of safety and efficacy. The results were generated from just nine patients treated at the lower dose of ALLO-647. Of those patients, three achieved a complete response (CR), meaning they had no evidence of disease.

The results could suggest that a low dose of ALLO-647 is all that's needed, which could make the combination safer and lead to more robust recoveries in white blood cell counts following treatment. It also supports the broad use of ALLO-647 as a next-generation lymphodepletion agent, which is required for many types of cancer therapies.

Now what

Allogene Therapeutics is now valued at $5 billion. Perhaps investors are increasingly considering the potential for a buyout from a larger pharmaceutical company, but the valuation does appear to price in a lot of future success. After all, the cell therapy developer is only now beginning the first phase 2 trial for its pipeline, and there are dozens of allogeneic cell therapies in development across the industry. 

Nonetheless, today's news is encouraging for existing shareholders. Additional results are expected to be reported at the virtual ASCO meeting at the end of May.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Allogene Therapeutics, Inc. Stock Quote
Allogene Therapeutics, Inc.
$11.48 (-1.88%) $0.22

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.