What does "off-the-shelf" mean to you in the context of advanced cancer treatments? If you said something along the lines of "a therapy that doesn't need lots of customization for each patient before being used," you're on the right track.
For biotechs like Caribou Biosciences (CRBU -1.33%) and CRISPR Therapeutics (CRSP 0.34%), developing oncology therapies that fit the bill of being off-the-shelf is a very complicated bioengineering problem that's worth a huge amount of money to solve. And if their results are to be believed, they're in the process of solving it.
Here's what you need to know about how they're doing it and why that matters for investors.
Nobody will ever tell you that making cell therapies is easy
To understand why these two biotech stocks could be great investments, you'll need a quick crash course in immuno-oncology.
You've probably heard of chimeric antigen receptor T-cells (CAR-T cells), which are genetically engineered cells of the immune system, reprogrammed to fight cancer instead of doing their usual tasks. Those cells can't simultaneously be circulating throughout the patient's body as normal while also being accessible for genetic engineering purposes as there are no laboratory facilities in the human body. There are two approaches to get around that constraint.
The first approach is to remove a bunch of the cells from the (gravely ill) patient via a harvesting procedure, send them to a manufacturing site, edit them to spec, ship them back, then place them back in the patient so that they can hopefully treat the cancer. During each of those steps, especially in manufacturing, some cells are bound to become unhealthy or die off, so it is traditional to keep your fingers crossed that enough healthy cells remain to effectuate a good outcome.
Remember: The patient was very sick before having their cells harvested, so their cells are often weakened or lethargic from the start, and the manufacturing process is often hard on them, too. To complicate matters even further, having a large volume of their immune and progenitor cells harvested can leave patients extra vulnerable to infections until they regenerate, which can take weeks. Thus, repeat dosing is both risky and difficult to implement in practice.
The second approach is to centrally manufacture cells harvested from a pool of healthy donors, then ship the cells out and infuse them into patients for treatment. This approach is known as an off-the-shelf cell therapy because it's manufacturable at mass scale rather than with each patient's cells.
There's no constraint on the quantity of cells used at the start since healthy people willing to donate cells are, thankfully, in abundant supply. So even if many of the cells die, more than enough will be left over to meet the quantity specified as a full dose of the therapy.
Which approach do you think is more efficient? If you said the second way, you're correct. That's why both CRISPR Therapeutics and Caribou Biosciences are developing some of their therapies that way, in contrast to others with marketed medicines that use the first approach, such as Bluebird Bio.
For reference, Bluebird's Zynteglo costs $2.8 million per dose. So the difficulty of the manufacturing process is no small concern for the company's addressable market size, which is likely smaller as a result of pricing out most eligible patients.
But there's another big constraint. One of the big advantages of using a patient's own cells instead of healthy donors to manufacture the therapy is that their body won't reject the edited cells as being foreign. The technical term for that rejection is Graft versus host disease (GvHD), and it's potentially fatal, so it's a very big deal. One workaround for GvHD is to deplete the patient's immune cells before getting treated, but it's sub-optimal for the same reason that it's a risk with the first approach we discussed.
It'll take some time for innovation to pay off
So any innovation that nullifies the risk of GvHD in the context of advanced cell therapies will be a big winner because it enables biotechs to have the best of both worlds: 1) centralized manufacturing with healthy donor cells, and 2) not making the patient sicker -- all at a much lower cost than the alternative. That's exactly what Caribou Biosciences and CRISPR Therapeutics are working on and, at least preliminarily, they seem to have the problem cracked.
CRISPR has three off-the-shelf clinical-stage immuno-oncology programs. Its CTX110 program for relapsed or refractory non-Hodgkin's lymphoma (NHL) appears not to cause GvHD whatsoever, and 67% of 27 patients in one of its clinical trials responded to the treatment. That's impressive, but more importantly, now that it has the preliminarily proven ability to develop mass-manufacturable cell therapies, it can start all manner of new programs to exploit the capability to the fullest. Compared to competitors like Bluebird using the far more unwieldy process, it can do research and development (R&D) faster and create products that ultimately have much higher margins despite lower price tags.
Caribou Biosciences is much the same story. Its CB-010 candidate in phase 1 trials is ready off the shelf, and it treats relapsed or refractory NHL. Of 16 patients in one of its trials, 69% had a complete response to treatment, and none exhibited GvHD. With enough time to advance CB-010 and its other programs through the clinic, it could well have multiple mass-marketable advanced immuno-oncology treatments approved for sale.
By 2030, both Caribou and CRISPR Therapeutics will have their claims of off-the-shelf immunotherapies put to more rigorous tests. If their medicines succeed, early shareholders will make plenty of money. Still, they're both pre-revenue biotech stocks, so the risks are high. But if you think big innovations will drive big returns -- and I'm of the strong opinion that they will -- the risks are worth the potential upside.
