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The CAR-T (chimeric antigen receptor T cells) space got a significant boost recently with an FDA advisory panel issuing a positive recommendation for an experimental treatment in this corner of the immune-oncology market. Last week, Swiss pharma giant, Novartis’ (NVS - Free Report) experimental CAR-T therapy, CTL019, got a unanimous (10-0) vote of approval from the FDA’s Oncologic Drugs Advisory Committee (ODAC). Novartis is looking to get CTL019 approved for the treatment of relapsed or refractory (r/r) pediatric and young adult patients with B-cell acute lymphoblastic leukemia (ALL). CTL019 is currently under priority review and timely approval would make it the first CAR-T cell therapy to be available.

How Does CAR-T Cell Therapy Work?

CAR-T falls under the ambit of cellular immunotherapy which involves using a patient’s own immune cells to attack and get rid of harmful disease cells in the body.

The CAR-T approach involves -- the collection of a patient’s T cells, their genetic modification outside the body, the incorporation of specific receptors which target cancer cells and finally, the re-infusion of the modified T cells back into the patient.

There is a lot of enthusiasm for CAR-T as early stage studies have shown that it can help achieve durable complete responses in some leukemias and lymphomas, including in patients who have suffered multiple relapses. But, CAR-T therapy comes with its own set of challenges including a high level of R&D investment as well as safety issues like serious immune toxicity (CRS) or neurotoxicity. Pricing could be an issue as well as these treatments will not come cheap.

However, these treatments have huge commercial potential and could well change the treatment paradigm.

5 CAR-T Stocks in Focus

Given the increased focus on this corner of the immune-oncology market and the possibility that a CAR-T drug could enter the market by year end, here is a look at 5 companies that are working on CAR-T cell treatments.

Kite Pharma, Inc. (KITE - Free Report) : Santa Monica, CA-based Kite is a cell therapy company engaged in the development of innovative cancer immunotherapies with the goal of providing rapid, long-term durable response and eliminating the burden of chronic care. The company’s focus is on CAR and T cell receptor (TCR) engineered cell therapies.

Kite is following close on the heels of Novartis where FDA approval of a CAR-T treatment is concerned. Lead pipeline candidate, axicabtagene ciloleucel, is currently under priority review in the U.S. for the treatment of patients with refractory aggressive non-Hodgkin lymphoma (NHL). A response from the FDA is expected by Nov 29, 2017. The company will be filing for EU approval in the third quarter. Axicabtagene ciloleucel targets the antigen CD19, a protein expressed on the cell surface of B-cell lymphomas and leukemias.

According to the company, the initial market opportunity for axicabtagene ciloleucel includes about 7,400 and 7,000 addressable CAR-T patients in the U.S. and Europe, respectively, while 7,800 new cases are diagnosed in Japan every year and 25,000 in key urban/eastern rural coastal areas of China.

Kite has had a strong run so far in 2017 with shares skyrocketing 128.1%, outperforming the Zacks-categorized Medical-Biomedical/Genetics industry which is up about 9%.

Bellicum Pharmaceuticals, Inc. (BLCM - Free Report) : Houston, TX-based Bellicum is a clinical stage biopharma company working on novel, controllable cellular immunotherapies for different forms of cancer, including hematological cancers as well as solid tumors, and orphan inherited blood disorders. The company’s proprietary chemical induction of dimerization (CID) technology platform is designed to potentially offer better safety and efficacy outcomes compared to other cellular immunotherapies.

The company’s pipeline candidates include BPX-501 (an adjunct T-cell therapy for allogeneic hematopoietic stem cell transplantation, registration studies advancing in the EU while preparations are on for registration studies in the U.S.), BPX-601 (GoCAR-T candidate, for solid tumors, designed with the proprietary iMC activation switch to improve efficacy, phase I), and BPX-701 (high affinity TCR candidate, for solid tumors, designed with the CaspaCIDe safety switch, phase I).

Bellicum’s shares are down almost 12% year-to-date (YTD), lagging the Zacks-categorized Medical-Drugs industry which is up 5.8% during this period.

Juno Therapeutics, Inc. (JUNO - Free Report) : Seattle, WA-based Juno is another key player in the cellular immunotherapy area. Although the company suffered a major setback with the development of its erstwhile lead pipeline candidate due to safety issues (including patient deaths), Juno is now focusing on JCAR017, a CAR-T cell product that targets CD19.

Juno is looking to get JCAR017 on the market as early as 2018 for NHL. The company also has a strong partner in Celgene (CELG - Free Report) .

Juno’s shares are up 44.9% YTD.

ZIOPHARM Oncology, Inc. (ZIOP - Free Report) : Boston, MA-based ZIOPHARM is a biotech company that uses innovative gene expression, control and cell technologies to provide safe, effective and scalable cell- and viral-based therapies for cancer and graft-versus-host-disease. ZIOPHARM’s immune-oncology platform includes CAR-T as well as other adoptive cell-based approaches.

ZIOPHARM is advancing programs in multiple stages of development together with Intrexon’s RheoSwitch Therapeutic System (RTS) technology, a switch to turn on and off, and precisely modulate, gene expression in order to improve therapeutic index.

Within the CAR+ T programs, the company is continuing with a phase I second generation study of CD19 specific CAR+ T for lymphoid malignancies and expects to move third generation CD19 with mbIL15 towards an early-stage study evaluating point-of-care. Plans are also on to commence a phase I study with CD33-specific CAR+ T for relapsed/refractory acute myeloid leukemia (AML) this year.

ZIOPHARM’s shares are up 9.5% YTD.

NantKwest, Inc. (NK - Free Report) : NantKwest is a clinical-stage immunotherapy company focused on using natural killer (NK - Free Report) cells to treat cancer, infectious diseases and inflammatory diseases. The company’s NK cell-based platform has been designed to induce cell death against cancer or infected cells by three different modes of action -- direct killing using activated NK cells (aNK); antibody-mediated killing using haNKs; and targeted activated killing using taNKs.

NantKwest’s shares are up 19.2% so far in 2017.

While Kite, ZIOPHARM, Bellicum and NantKwest are all Zacks Rank #3 (Hold) stocks, Juno is a Zacks Rank #2 (Buy) stock. Meanwhile, you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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