- TCRR develops cell therapies for solid tumors.
- The pipeline is in a very early stage, with some early safety scares.
- The stock is trading way below cash.
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TCR2 Therapeutics (TCRR) develops solid tumor-focused TCR (T Cell Receptor) directed therapies. The company develops what it claims are first-in-class TCR Fusion Construct T cells (TRuC-T cells), which are designed to harness the entire TCR signaling complex. Of the 6 different signaling subunits of TCR, only one is used by existing CAR-T therapeutic approaches. The company’s fundamental hypothesis is the following:
Research over more than two decades has shown that each of the TCR subunits makes distinct contributions to the activation and regulation of T cells and the sum of the TCR subunits is required to optimally activate and control the function of T cells. We believe that engaging the entire TCR signaling complex is required to fully realize the potential of T cells in their fight against cancer.
The company describes the advantages of its TRuC-T cells as follows:
A number of CAR-T therapies are available, but they face difficulty in solid tumors. TCR therapies need HLA (Human leukocyte antigen) to work, but HLA can be downregulated in many cancers. TCRR’s construct is claimed to be able to recognize tumors without HLA.
Their pipeline looks like this:
Lead candidate, peculiarly named gavo-cel, formerly known as TC-210, also gavocabtagene autoleucel, has an ongoing Phase 1/2 clinical trial in non-small cell lung cancer (NSCLC), ovarian cancer, malignant pleural/peritoneal mesothelioma, and cholangiocarcinoma. The company estimates that there are 80,000 US patients for these four indications. TCRR has interim data from the phase 1/2 trial, where the therapy has shown “consistent clinical benefit, with every patient experiencing tumor regression and a 100% disease control rate (‘DCR).” Besides these, other key takeaways include:
This also includes the first ovarian cancer patient to ever achieve a PR with an engineered cell therapy. Gavo-cel has an orphan drug designation for mesothelioma. Safety profile, so far, has been manageable; however, the stock slumped 30% in September on poor safety data:
In the trial, two dose limiting toxicities were reported: one Grade 3 pneumonitis at DL1 that resolved with supportive measures, and one Grade 5 bronchoalveolar hemorrhage at DL5, which along with the development of severe CRS in all 3 patients treated at the dose level.
Despite very interesting efficacy data in a very difficult cancer, Wedbush downgraded TCRR and cut the price target to $11 from $45.
To put that data in perspective:
Of the five patients, one had ovarian cancer and four had mesothelioma, a cancer of the mesothelium—the thin tissue that lines the lung, chest wall and abdomen—with a five-year survival rate in the single digits. Before the trial, the patients had undergone a median of five other treatments. Three had tried checkpoint inhibitors.
The company has discussed gavo-cel’s competitive positioning in the following diagram:
Second lead candidate TC-110 is targeting hematological malignancies. This asset is also in a phase 1/2 clinical trial targeting adult acute lymphoblastic leukemia (aALL) and with aggressive or indolent non-Hodgkin’s lymphoma (NHL). In preclinical studies, this asset has shown good anti-tumor activity.
The company’s IP follows from the work of scientific founder Dr. Patrick Baeuerle, a German immunologist who developed the world’s first bispecific antibody, Blincyto. The original TRuC patent application was filed in 2015. They own five issued U.S. patents and eight issued foreign patents in all, and a number of pending patent applications.
TCRR has a market cap of $178mn, debt of $27mn, and cash balance of $295mn, therefore, the company’s enterprise value is negative. Research and development expenses were $20.3 million for the third quarter of 2021, and SG&E was $6mn. The company expects the cash on hand to last until 2023.
Insider transactions are nearly non-existent, and the few that are there, are sells.
The company recently leased a large manufacturing unit in Maryland. This is the company’s first in-house manufacturing unit; besides this, the company has a tie-up with Catapult UK for manufacturing, and a clinical manufacturing agreement with ElevateBio.
TCRR is a very early-stage company, which is yet to properly prove its claims. Those claims are interesting, and they have their logic. However, we are not too excited about cell therapies right now. These have a way of sprouting safety and manufacturing issues at the drop of a hat. We will continue to sit on the sidelines.
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This article was written by
Avisol Capital Partners is made up of a team of medical experts, finance professionals and techies, all of whom invest their own money in the picks they share. They aim to help readers find the middle ground between value and growth investing, as they demystify the biopharma industry.They lead the investing group Total Pharma Tracker where they offer a monthly updated catalyst database, an investability scoring system for quick reference ideas, and direct access in chat for dialogue and questions. Learn more.
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