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Nkarta (NASDAQ:NKTX) had a slight bounce in early January as fellow NK cell remedy developer Destiny (FATE) met with a serious impediment and trashed its whole NK cell program. Nonetheless, NKTX has continued to fall after that, and it stays speculative whether or not the autumn was because of the market seeing NK cell packages in a poor mild after Destiny’s catastrophe, or one thing else. I lined NKTX in November, the place I used to be usually bullish, but it surely wants additional protection after Destiny’s issues.
Nonetheless, comparisons finish right here – Nkarta, with simply 8 years in existence, has produced a lot better knowledge than Destiny, which has been round for over 15 years. I mentioned a few of that knowledge once I final lined it in November. There I mentioned that part 1 knowledge from NKX101 is at the very least pretty much as good as Destiny’s FT596. One distinction is that FT596 makes use of induced pluripotent stem cells whereas NKX101 makes use of stem cells from wholesome donors. One other main distinction: FT596 is now no extra, whereas NKX101 is progressing in matches and bounds – to combine up a few English idioms.
Now, when you have a look at a few of FT596 knowledge:
Within the second and third single-dose cohorts of the Monotherapy and Mixture Arms comprising a complete of 14 sufferers, 10 of 14 sufferers (71%) achieved an goal response, together with seven sufferers (50%) that achieved a whole response (CR), as assessed by PET-CT scan per Lugano 2014 standards on Day 29 following FT596 dosing. Eight of 10 sufferers (80%) that had not beforehand acquired CD19-targeted CAR T-cell remedy achieved an goal response, together with 5 sufferers (50%) that achieved CR. Two of 4 sufferers (50%) that had beforehand acquired CD19-targeted CAR T-cell remedy, each of whom have been handled within the Mixture Arm, achieved a CR. Within the first single-dose cohorts of the Monotherapy and Mixture Arms comprising a complete of six sufferers, just one affected person achieved an goal response, suggesting dose-response therapy results for FT596.
A distinction is that this knowledge is from a bigger variety of sufferers. Nonetheless, 3 out of 5 reaching full remissions within the highest dose is spectacular. Notice, although, that that is from 1 billion cell dose cohort, the best for Nkarta, whereas for Destiny, the information is from 300 million, and the 900 million cohort knowledge produced 4 out of 6 full remissions, as we noticed just a few months later. So, Destiny’s knowledge was additionally fairly spectacular, and this means that perhaps the market is worrying that if Destiny, with such good knowledge, was pressured to shelve its NK program, perhaps Nkarta could have the same drawback, as properly.
A dose escalation cohort of NKX101 was enrolling final 12 months, and the corporate plans to announce knowledge within the first half of 2023.
The opposite program is NKX109, the place we noticed final time that there was an 83% ORR amongst NHL or non-Hodgkin’s lymphoma sufferers with the upper dose, whereas ALL or acute lymphoblastic leukemia sufferers noticed no drug exercise. In December, the corporate offered up to date knowledge from this trial. Key highlights:
7 of 10 sufferers handled with NKX019 monotherapy at 1 billion and 1.5 billion CAR NK cells per dose achieved full response (70% CR price)
5 CRs achieved throughout all dose ranges after a single cycle (3 weekly doses) of NKX019 monotherapy; 3 partial responses deepened to CR with extra cycles
Sufferers with CR noticed throughout a number of NHL histologies, together with LBCL
Consolidation dosing administered to 7 sufferers with CRs with intention to eradicate residual tumor cells and lengthen response
Sturdy responses of higher than 6 months achieved in a number of sufferers
Early security profile helps outpatient administration and exhibits no neurotoxicity / ICANS, graft versus host illness (GvHD), or >Gr3 cytokine launch syndrome (CRS’)
Thus, though the dose was excessive, it was well-tolerated by sufferers with no dose-limiting severe opposed occasions. This lack of troubling opposed occasions is the important thing USP of Nkarta. As CEO Paul Hastings mentioned, “the rising security profile of NKX019 is doubtlessly game-changing.”
One other key distinction on which Nkarta focuses is that NKX109 targets the identical affected person inhabitants as the primary authorized CARTs Yescarta and Kymriah, with the distinction that whereas these have been autologous, that is allogeneic. Which means these are off-the-shelf, not needing sufferers to attend for months for therapy whereas their illness rages on. Furthermore, whereas these autologous therapies have been, of necessity, solely given as soon as, NKX109 could be – and was really given – a number of instances. This was very helpful as a result of in at the very least 3 sufferers with PRs, a second infusion transformed that PR to a CR.
Sturdiness was one other main optimistic. Sufferers maintained responses for over 6 months, with one affected person with LBCL having a CR lasting 9 months. The corporate is giving consolidation doses to seven sufferers with CRs. The concept is to fully take away residual tumor cells and lengthen responses.
The corporate plans to launch additional knowledge this 12 months.
Financials
NKTX has a market cap of $164mn and a money stability of $354mn. Analysis and growth (R&D) bills have been $90.9 million for the total 12 months 2022 and $26.8 million for the fourth quarter of 2022. Basic and administrative (G&A) bills have been $28.1 million for the total 12 months 2022 and $8.1 million for the fourth quarter of 2022. At that price, the corporate maintains that it has a money runway to 2025.
Bottomline
Clearly, there’s a dichotomy between what the corporate says is excellent knowledge – and it definitely appears so – and the market notion right here. One trace comes from Oppenheimer, who lately downgraded to Carry out from Outperform, telling traders that given the progress of bispecific antibodies and industrial CAR-Ts in treating lymphoma and myeloma, NK-cell therapies “are quickly being left behind.” Whereas this will likely certainly be the explanation for the poor market efficiency of the inventory, I’m stunned {that a} therapy producing this degree of remission is being sidelined with a purpose to make manner for therapies that could be extra leading edge, however are nonetheless much less confirmed. I feel the present lows make for a superb alternative to purchase right into a doubtlessly revenue making however considerably dangerous inventory.
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