Gamida: Catalysts Ahead, Looks Interesting

Summary

• GMDA addressed its cash issues, but its approval got a little delayed.
• That was because the FDA raised manufacturing concerns.
• The company seems confident in its ability to address those.
• Looking for more investing ideas like this one? Get them exclusively at The Total Pharma Tracker. Learn More »

Gamida Cell (NASDAQ:GMDA) is an Israeli company developing an enhanced version of commonly used cord blood HSCT. I covered it in March 2019, when I said that while the low cash position and somewhat obscure nature of the therapy fails to convince us, this is interesting enough to bear watching.

Since I wrote that, Gamida has fallen, and kept on falling; until now. I wrote that on March 12, 2019, when the stock was trading near $12. Right after that, for the entire two years since now, the stock stayed below $12 - indeed, it went down to near penny stock level a few times. However, recently, the stock has seen some movement. It went up to over $11 recently, then fell back to current levels of $8. So we need to see - what changed?

The core value proposition of GMDA is that hematopoietic stem cell transfer or HSCT is curative for a number of cancers, but it has certain limitations. These are basically four - lack of rapid availability due to type mismatch, inefficient engraftment, delayed onset of immune activation leading to infections, and host rejection leading to graft versus host disease or GvHD. GMDA’s nicotinamide-based technology resolves all of these limitations some of the time. Its pipeline looks like this:

Source

The company recently published data from the phase 3 AML trial of lead candidate Omidubicel. The trial compared the time to neutrophil engraftment as the primary endpoint between nicotinamide enhanced ex vivo expanded umbilical cord blood grafts, i.e. Omidubicel, versus standard cord blood, in AML patients. The trial met its primary endpoint successfully and with statistically significant p-value.

Source

In terms of safety, there were fewer viral infections in the drug arm, showing the benefit of Omidubicel. Although Omidubicel did not differentiate itself statistically significantly from standard UBC for GvHD, either grade 2-4 or grade 3-4 at 100 days, there was a noticeable trend in favour of Omidubicel in terms of reduced incidence of GvHD.

The study showed, in summary:

• Myeloablative transplantation with omidubicel results in

• Faster hematopoietic recovery

• Fewer early infections

• Fewer days in the hospital

• No excessive toxicity associated with omidubicel compared to standard umbilical cord blood transplantation

• Durable engraftment >10yrs (earlier studies)

• Omidubicel should be considered a new standard of care for patients eligible for umbilical cord blood transplantation

The trial successfully met the primary endpoint, and all three of its secondary endpoints. The prespecified secondary endpoints of the study were the proportion of patients who achieved platelet engraftment by day 42, the proportion of patients with Grade 2 or Grade 3 bacterial or invasive fungal infections in the first 100 days following transplant, and the number of days alive and out of the hospital following transplant.

The company had originally planned to bring the treatment to market this year. However, the FDA recommended that the company generate additional manufacturing- related data prior to requesting a pre-BLA meeting. The company now plans to file the NDA by the second half of 2021, and launch the drug by mid-2022 under a Breakthrough Therapy Designation.

Financials

GMDA has a market cap of $491mn and a cash reserve of $73mn. The company raised $65mn through an offering in December, and another $75mn from Highbridge Capital last month. So they are adequately funded, although they could certainly use more funds.

Bottom Line

HCST is a major market and the only curative approach in a number of cancers. GMDA’s treatment could, in theory and as demonstrated in trials, remove a number of its limitations. Of the four limitations I listed at the beginning, Omidubicel was able to address the first three adequately, and saw trends of betterment of GvHD problems in patients. They are trading a little lower than their recent highs because of diluting their shares, but the dilution was necessary. They are also trading low because of the slight delay in filing and approval. However, manufacturing concerns are quite common for these sorts of therapies, and the company seems confident in its ability to address them. As such, while this is NOT an official buy recommendation, this may be a buying opportunity for those investors with a greater tolerance for risk.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Comments

[biogenius]

Beyond the manufacturing issue, there is the marketing issue even if approved. How good is a small Israel company going to sell the product?

[ofirm]

@biogenius there are a small number of centers doing 80% of the
volume in the u.s market.