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Nanjing Legend/GenScript Bio and Cancer's Next Big Thing: CAR-T

publication date: Feb 16, 2018
 | 
author/source: Richard Daverman, PhD

It was a perfect underdog story: a small, little-known company, with no history of clinical success, wows the world's biggest cancer convention with breakthrough data. That's what China’s Nanjing Legend Biotech did at the most recent ASCO meeting, held in June 2017 in Chicago. In early results, the company announced its CAR-T candidate produced clinical remission in 94% of the trial's multiple myeloma patients, all of whom suffered from relapsed or refractory disease.

At the moment, there is no cure for multiple myeloma, only remission. The five-year survival rate is about 50% in a disease that affects people above the age of 65 almost exclusively. Only five of the Nanjing Legend patients had reached one year post-treatment by last June, so long-term survival for its CAR-T treatment isn't known yet.

The results are a tremendous boost for Nanjing Legend, but they are also a vindication for CAR-T therapies in general, and even more for the field of immunotherapy, currently the next Big Thing for cancer. And, for those who are still not aware of China's drug development sophistication, the results offer another sort of wake-up call: significant drug discovery is happening in the world's most populated nation, a country once synonymous with inexpensive knock-offs of western goods.

Legend's strong results were soon monetized. In December 2017, Legend found a global partner for its CAR-T drug in Janssen Pharma, the biotech arm of multinational Johnson and Johnson (NYSE: JNJ). The price wasn't cheap: $350 million upfront plus unspecified milestones for regulatory and sales milestones. The two companies will split the costs and profits 50/50 except for China, where Legend will own a 70/30 majority share.

The whole story is a tremendous boon for GenScript Biotech (HK: 1548), Legend's parent, and a company that was already doing well by providing research products and services to global biotechs. In the first half of 2017, GenScript reported a profit of $15 million on revenues of $63 million.

That's a good business -- solid, predictable -- but few events in business can make the sudden seismic shift in economic prospects that a breakthrough drug offers. GenScript is up 20 times over its IPO price since making its public debut in Hong Kong two years ago, and it is five times higher than it was at this time last year. 

The Competition

One month after the Nanjing Legend surprise, CAR-T candidates got further reinforcement from an entirely different quarter, one that has nothing to do with China. An FDA Advisory Panel voted 10-0 to recommend approval of a Novartis (NYSE: NVS) CAR-T therapy, Kymriah. The drug produced a complete response in 83% of pediatric and young adults with relapsed/refractory B-cell acute lymphoblastic leukemia (ALL). Novartis says it expects 79% probability of survival at 12 months. Kymriah was approved by the FDA in short order.

Soon after, Kite Pharma was granted approval for Yescarta as a treatment for adult patients with relapsed or refractory large B-cell lymphoma. That brought the number of approved CAR-T drugs to two. Gilead Sciences (NSDQ: GILD) responded by paying $11.9 billion to acquire Kite.

Because the drugs are effective, and because there isn't much competition, they are expensive. Kymriah costs $475,000 per treatment, Yescarta about $100,000 less. Hospital and doctor costs will easily add $100,000, given that the drugs require treatment for cytokine release syndrome. which afflicts most CAR-T patients (an uncomfortable fever-like side effect for patients, potentially serious but usually controlled by drugs).

Novartis graciously offered patients efficacy insurance. If Kymriah does not show efficacy in the first month, there is no charge. The protects potential patients from the risk of signing up for an expensive drug that turns out not to work out in your particular case. Of course, this is for US use, where drug price tags are the highest in the world.

China prices are lower. There is one therapy available in Hainan, an island near Hong Kong and Macau, where looser regulations allow the sale of unapproved drugs to medical tourists, mostly well-off patients from other parts of China. The product, made by a company called Innovative Cellular Therapeutics, is available for $76,000 according to Bloomberg (see article). CAR-T prices could fall to $15,000 in three years, the article continues, citing local reports.

This underscores that a China biotech will not be able to charge sky-high prices for CAR-T drugs, at least not for long. CAR-T drugs are expensive to produce, since each dose is produced from a patient's own T-cells, which are taken to a lab, artificially altered to recognize a cancer, and then expanded into a clinically meaningful dose before being infused into a patient. The laboratory process takes about three weeks.

Given the rise in GenScript's stock price, analysts have begun to warn about the pitfalls of drug development -- not many drug candidates become approved treatments, especially if they are novel technologies. However enticing the prospects, GenScript's risk is high, is how the argument usually goes.

It's true that novel treatments, even if they become approved, aren't always successful, as Provenge, the early immunotherapy for prostate cancer, makes clear. Provenge was widely anticipated by investors, and its maker, Dendreon, watched its stock price climb, until it began sales. Provenge was not a huge advance over other treatments in terms of efficacy, and it was expensive to produce and expensive to buy. Dendreon eventually declared bankruptcy. They built the facilities, but the customers didn't come.

Juno Therapeutics, once the leader in CAR-T drugs suffered a different setback: in a trial of its lead candidate, about 13% of the patients died from cerebral edema, a side effect that does not seem to affect most CAR-T drugs. To Juno, the side effect seemed anomalous, and it tried various fixes to its regimen, but nothing stopped the side effect. The negative press forced the company to stop development of its lead drug, putting its energy into other members of its portfolio. Juno lost its lead position in CAR-T as a result. 

CD19-specific CAR-T drugs have been particularly successful in B-cell malignancies, either those that develop in the bone marrow (B-cell acute lymphoblastic leukemia) or those that develop in secondary lymphoid organs (chronic lymphocytic lymphoma, diffuse large B-cell lymphoma. Hematopoietic stem cell transplant is the major treatment option for these diseases.

In contrast, CAR-T has not produced very positive results in solid tumor cancers. Optimists hope that combination therapies, possibly with the other largely unknown new field, PD-1/PD-L1 drugs, may make CAR-T drugs effective in this major area of cancer.

However, for most companies involved in CAR-T, the defining statistic may end up being comparative efficacy: the best-in-class drugs will dominate in the market.

There are, according to at least one consultant, an astonishing 186 CAR-T molecules in development in the US, and another 153 in China. Among other things, the numbers show that CAR-T does not have an especially high barrier-to-entry. Assuming that most of the 339 companies are not tackling difficult targets like solid tumors, this means a lot of competition trying to solve the same problems. With Alzheimer's, nothing seems to work. That doesn't seem to be the case with CAR-T.

CAR-T technology appears to offer new levels of efficacy (in limited indications) to biotechs, both seasoned companies and startups. The only differentiation, then, becomes which one works best. Legend's 94% remission rate in a difficult-to-treat population currently seems astonishing. But what happens if several CAR-T candidates can do the same? Will Legend's offering prove to be the best available?

See our other articles on Legend Pharma.

Disclosure: none.


 

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