Gamida Cell (GMDA +0.00%) and its approach to attacking cancer with natural killer cells faded into the shadows shortly after the company's stock market debut in 2018. After years of languishing, clinical trial results presented during a virtual scientific conference recently propelled this under-the-radar stock 50% higher overnight.
Here's why scientists and investors are increasingly interested in Gamida Cell's novel cancer therapy candidates.
Image source: Getty Images.
Culture expansion
Bone marrow transplants effectively treat a range of blood-based cancers, but thousands of eligible patients never undergo the procedure due to a lack of available donor cells. Gamida Cell's lead candidate, omidubicel, uses proprietary technology to turn small samples of donated stem cells into large cultures without losing efficacy. This allows omidubicel to be used off the shelf in transplants for people with a variety of cancers and other blood-based disorders.
Omidubicel already achieved its main goals in a phase 3 study. The Food and Drug Administration will probably begin reviewing an application that could make it a new source of bone marrow transplant material in early 2021. While omidubicel is progressing along nicely, early data for a younger program in phase 1 testing is drawing the most attention right now.
Natural killers
Gamida Cell's second program to enter clinical stage testing, GDA-201, is responsible for the stock's recent surge. This treatment is essentially an off-the-shelf infusion of natural killer (NK) cells, a component of the immune system with a tendency to attack cancer cells.
Among 19 patients with non-Hodgkin lymphoma (NHL) who added GDA-201 to treatment with Rituxan, 13 have achieved complete remission. This would be an impressive remission rate for newly diagnosed patients, but these were patients with difficult forms of NHL who had relapsed after standard care or didn't respond in the first place.
While these early results look outstanding, there are some important factors to consider. This phase 1 study included a group of multiple myeloma patients that didn't show dramatic response rates. Also, patients weren't given GDA-201 on its own. Ascending doses of GFDA-201 were combined with Rituxan plus standard chemotherapy.
The lack of serious adverse events despite reaching the maximum intended dosage suggests GDA-201 could become a safe and effective new treatment option for relapsed NHL patients, but there's still a long road ahead. Before the FDA looks at an application for GDA-201, Gamida Cell will probably need results from a larger study with a control group to make sure Rituxan and standard chemotherapy aren't doing all the work.
Image source: Getty Images.
Not alone
Gamida Cell isn't the only company developing potential new NK treatments for NHL patients. Fate Therapeutics (FATE 2.76%) is testing an off-the-shelf treatment NK therapy called FT516. Early results from the first handful of patients treated suggest Gamida has some competition.
Among the first four NHL patients treated with FT516, one worsened, one responded, and two achieved complete remission. Before making any apples-to-apples comparisons with GDA-201, it's important to note these results come from a different patient population. If Fate's candidates can repeat these results in larger trials down the road, though, Gamida could face competition for a limited population of relapsed NHL patients.
Looking ahead
Long before Gamida Cell's IPO, Novartis (NVS +0.16%) acquired a 15% stake of the company for just $35 million. In 2015, the pharmaceutical giant passed on an opportunity to acquire Gamida Cell outright for a fraction of the biotech's recent market cap of around $530 million.
If upcoming clinical trial results change Novartis' mind about buying Gamida Cell, shares of the biotech could more than double overnight. With operations that generated around $11 billion in free cash flow over the past year, Novartis could put together a new buyout offer for Gamida Cell at a steep premium without breaking a sweat.
As a treatment for NHL that might require a few infusions, GDA-201 isn't going to be as easy to sell as cancer drugs that can be packaged into capsules. That said, Gamida Cell's relatively modest market value could still rise manyfold if GDA-201 or omidubicel eventually earn approval.
Clinical trial results that fall in line with the success Gamida Cell has already reported could make this stock look like a good deal at several times its recent price.
