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Of late, biotechnology and pharmaceutical companies are investing in immuno-oncology research therapies as it remains a key area of focus, thanks to its vast growth potential. Last week, the immuno-oncology space grabbed investors’ attention with the FDA approving Novartis AG’s (NVS - Free Report) breakthrough gene transfer treatment, Kymriah (tisagenlecleucel) suspension for the treatment of patients up to 25 years of age with B-cell precursor acute lymphoblastic leukemia (ALL) that is refractory or in second or later relapse.

Kymriah, formerly CTL019, is the first chimeric antigen receptor T cell (CAR-T) therapy approved. A novel immunocellular therapy and one-time treatment, Kymriah uses patient's T cells to fight cancer.

While the long-term impact of the treatment is yet to be evaluated, the approval opens up new frontiers in the treatment of cancer. To start with, CAR-T uses patient’s cells to identify and destroy cancer cells, thereby making it different from other small molecule or biologic therapies. During the treatment, T cells are drawn from a patient's blood. These cells are then reprogrammed in the manufacturing facility to create genetically coded cells to express a chimeric antigen receptor to recognize and fight cancer cells and other B cells expressing a specific antigen.

With the approval of Kymriah, investors have started to shift their focus on a number of companies which have been developing their pipeline candidates to remain afloat in the highly competitive environment.

4 Stocks That Warrant a Look

Kite Pharma Inc. (KITE - Free Report) is expected to receive approval for its CAR-T therapy axicabtagene ciloleucel (axi-cel) shortly. The Biologics License Application for the candidate was submitted in March 2017. The application was gr priority review in the United States and the FDA is expected to give a decision on Nov 29, 2017. The candidate is also under review in the EU with a tentative approval expected in 2018. The candidate is being developed for the treatment of refractory aggressive non-Hodgkin lymphoma, which includes diffuse large B-cell lymphoma, transformed follicular lymphoma and primary mediastinal B-cell lymphoma.

Given the likely approval and potential in the space, Gilead Sciences Inc. (GILD - Free Report) has inked a deal to acquire Kite Pharma for $11.9 billion. Kite Pharma’s stock has moved up 297.0% year to date, which compares favorably with a 15% increase registered by the industry. The company presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Juno Therapeutics, Inc. (JUNO - Free Report) is also developing cell-based cancer immunotherapies based on its CAR and high-affinity TCR technologies to genetically engineer T cells to recognize and kill cancer cells.  The company is currently conducting a phase I trial with JCAR017 in adult r/r aggressive NHL, including r/r DLBCL, and planning to file an IND in 2017 for a planned phase I/II trial with JCAR017 in r/r chronic lymphocytic leukemia (CLL). The company expects an approval in 2018. Shares of the company have rallied119.7% year to date. The company currently carries a Zacks Rank #4 (Sell).

bluebird bio, Inc. (BLUE - Free Report) in collaboration with Celgene Corporation (CELG - Free Report) is evaluating bb2121, a CAR-T cell product candidate for the treatment of multiple myeloma in a phase I study.  The company expects to initiate a phase I study to evaluate the safety and efficacy of bb21217, the next anti-BCMA CAR-T cell product candidate. Shares of the company have gained 105.0% year to date. The company presently carries a Zacks Rank #3.

ZIOPHARM Oncology, Inc. (ZIOP - Free Report) is developing CAR-T cell therapies for advanced lymphoid malignancies. The company is currently enroling patients for an investigator-led phase I study using second-generation CD19-specific CAR+ T cells with a revised CAR structure in patients with advanced lymphoid malignancies. Shares of the company have rallied 18% year to date. The company at present carries a Zacks Rank #3.

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