With shares of Caribou Biosciences (CRBU 7.42%) up by 51% in the past 30 days, there's more than one reason why you might want to consider a purchase for yourself. Between its recent release of some great early-stage data from its flagship program and its powerful technology platform, this biotech might be going places.
So let's dive into the specifics a bit more and examine three reasons why Caribou is a screaming buy in July and beyond.
1. Its lead candidate is looking great
Caribou's most advanced program is called CB-010, and it's being investigated in a phase 1 clinical trial for treating relapsed or refractory B-cell non-Hodgkin's lymphoma. On July 13, the biotech reported that 44% of the 16 patients in the trial had experienced a complete response to the therapy, rendering them free of detectable cancer for more than six months. In total, 94% of the patients responded to the treatment for at least some period of time, and there were very few reports of severe side effects.
To put it bluntly, the data looks awesome. While there's still plenty more time in CB-010's clinical trials that could result in the findings being repudiated, at this early stage it's hard to do much better than what Caribou has in hand. And if you're the type to invest in young biotech companies, that's enough of a strong reason to buy a few shares.
2. Its balance sheet is rock solid
For a small biotech, it doesn't get much better than how well-capitalized Caribou is at the moment.
With $228 million in cash and equivalents as of Q1, and a stock offering worth $125 million on July 13, Caribou has plenty of gas in the tank to spend on research and development (R&D). Its trailing 12-month total expenses were only $120 million. So it should have enough money for almost 3 years before it will need to raise more.
When it comes time, it probably won't have too much trouble taking out more debt as it only has around $27 million at the moment. Of course, whiffing its clinical trials could complicate that process. Either way, it'll still retain the option of issuing more stock to generate capital, and investors should expect it to, especially if it has trouble finding a larger company to collaborate on getting its therapy programs out the door.
3. Its technology platform is exceptionally advanced
Caribou's cell therapies are among the most sophisticated to ever exist. While a lot still needs to be proven about their actual safety and performance, the company's level of technological advancement is sufficient to be a reason to buy the stock.
You can think of the cells it's developing as having more genetically engineered features than others on the market and in development. And that will likely make them far more effective, safer, and broadly applicable, while costing less to manufacture.
Let's take its CB-012 program that's currently in pre-clinical development for acute myeloid leukemia as an example. With CB-012, the cells of the therapy product have five different edits to their genomes. The first edit is what gives the engineered cells the ability to counter cancer cells instead of just doing their normal job in the body. All of the cell therapies on the market have similar edits that are specific to the disease they're trying to treat, so that isn't remarkable -- but the other edits are.
Three of them are designed to make the cells both resilient and invisible to the patient's immune system, which is key to preventing certain severe side effects from treatment, and also to increase the duration that they can perform anti-tumor activity before degrading. And as if that weren't enough, CB-012 has a fifth edit that prevents the therapeutic cells from getting exhausted as quickly as they would otherwise as a result of doing their new anti-cancer job. In total, the therapy should be far more effective as a result.
For the sake of comparison, Novartis' commercialized cell therapy Kymriah for relapsed or refractory follicular lymphoma only has one edit, and it's the equivalent of the first one I mentioned. That means it simply can't be as good at its job as what CB-012 could theoretically be. And in an immuno-oncology market that's starting to look increasingly crowded, Caribou's platform is powerful enough to make it stand out, which is why it's a buy.
Just remember that by virtue of being a pre-revenue biotech company, this is still a very risky stock.