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Not For The Faint Of CAR-T - The CAR-T Landscape In Early 2015

|Includes: BLCM, BLUE, CIBSF, CLRB, Juno Therapeutics (JUNO), KITE, NVS

This is an extract from a longer report

If you followed last year's explosion of enthusiasm in CAR therapies you might have assumed that this was a super-novel approach that had just burst onto the scientific stage. In fact work on the synthetic modification of a patient's T cells to make them target a specific disease has been ongoing for over 20 years.

But it is only relatively recently that two things happened: the CD19 antigen was pinpointed as an ideal target in haematological cancers thanks to its almost exclusive presence on B cells and

B-cell precursors; and the current, so-called second-generation CAR (chimaeric antigen receptor) was designed.

This marked the transformation of CARs from just another interesting scientific concept to one of today's most promising oncology therapies. Progress has accelerated since the 2013 American

Society of Hematology (NYSE:ASH) meeting, and right now CAR therapy is already being hailed by some as a revolution that - in some patients - amounts to a cure.

While the science behind the current CAR constructs might be complex, the idea is actually relatively simple. In broad outline, the approach harnesses a patient's own immune system to direct it specifically against a disease.

A CAR is a synthetic receptor designed to target a specific tumour cell surface antigen, and the approach involves genetically modifying T cells (usually the patient's own) to make them express such a receptor on their surface.

The resulting CAR-T cells recognise the tumour antigen in question, and on binding with it the

CAR sends an intracellular signal to the T cell, prompting the destruction of the cancer cell.


A scientific advance of such magnitude has, naturally, been accompanied by untempered enthusiasm from investors desperate to jump into "the next big thing".

Look no further than the fund-raising record of Kite Pharma, Juno Therapeutics and Bellicum

Pharmaceuticals - three Nasdaq-listed US companies that offer pure-play exposure to cell therapy. All have seen huge demand for their offerings to the extent that every investor approach has yielded more cash than initially targeted.

A huge inflow of money into this space was triggered by the last edition of the ASH meeting, at which CAR therapies stole the show. Bellicum and Juno both floated on December 19, shortly after the meeting ended. Cellectis, a CAR-T company based in Paris and traded on the NYSE Alternext market, has announced plans for a secondary listing on Nasdaq.

Much potential lies in CAR therapy. However, with investors willing to value such early-stage technologies at such huge valuations, it is clear that important risks are being ignored.

The market appears to be steadfastly refusing to heed the lessons of the biotech boom and bust of 1999/2000.

Nevertheless, none of this means that CAR companies do not offer smart investors plenty of opportunities to benefit, and indeed in the early days of 2015 this space looks like being one of the top investment themes of the year.


T-cell manipulation has a long history, having initially involved the expression of very basic CAR constructs in an effort to treat HIV. The first CARs had a very simple design, with a 1991 scientific paper describing a simple CD4 extracellular domain and an intracellular CD8ΞΆ (zeta) intracellular signalling region.

Things moved on, and nowadays the favoured structure of a so-called second-generation CAR includes a complex scFv domain whose heavy and light chains mimic those of an antibody, plus an intracellular CD3 signalling section as well as a co-stimulatory domain (see below).

Third-generation CARs have two co-stimulatory domains to increase potency further, though work here is very early.

Second-generation CAR construct

When the CAR-engineered T cell engages the target cancer surface antigen it triggers further multiplication of the cells in the body, and activation of a cytotoxic (cell-killing) response. These

T cells have an "auto-regulatory" capability, in that they multiply in the presence of the target antigen, but their number falls as the target declines.

In its most advanced - autologous - version the actual therapy is a complex procedure, involving the collection of a patient's white blood cells via leukapheresis, and while these are outside the body certain T cells are isolated and transfected, usually using a viral vector, with the genetic material to make them express the desired CAR on their surface.

After this ex vivo modification the cells are expanded until their number reaches the desired "dose", whereupon they are infused back into the patient.

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Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.