Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe


Small-Cap Biotech Benefits from First FDA Approval of CAR-T Therapy
Research Report

Share on Stocktwits


The first approval of a cell therapy for treatment of pediatric blood cancer prompted H. C. Wainwright to increase its price target for a UK-based biotech manufacturing one of the therapy's components.

In an Aug. 31 research report, Wainwright analyst Joseph Pantginis commented on FDA approval of Novartis AG's (NVS:NYSE) Kymriah (tisagenlecleucel) for pediatric patients with acute lymphoblastic leukemia (ALL) "ahead of the September 29 PDUFA data following the unanimous positive ODAC (Oncologic Drugs Advisory Committee) vote this past July 12. This first approved CAR-T is priced at $475K vs. our projection of $400K."

Oxford BioMedica (OXB:LSE), as the "sole manufacturer for the lentivirus used to create Kymriah," will be a "direct beneficiary" of the approval, Pantginis wrote.

In light of the early approval, H. C. Wainwright reiterated its Buy rating for Oxford BioMedica and increased its price target to £0.21 from £0.18. "The factors impacting our price target change include: 1) increasing our Kymriah projected chance of success from 90% to 100% for ALL, and 75% to 85% for DLBCL (diffuse large B-cell lymphoma); and 2) based on the adjusted cost of therapy, we are increasing our projected peak sales to $600 million from $525 million for ALL, and $3.85B from $3.75B for DLBCL, " Pantginis wrote. Oxford BioMedica currently trades at ~£0.10/share.

Oxford BioMedica's "recent manufacturing agreement with Novartis was extended for an additional three years (we anticipate longer going forward)," Pantginis stated. "While undisclosed, we project that the overall royalty payable to OXB is 3% of Kymriah sales. . .Therefore, we are adjusting our Kymriah based 2022 revenue to OXB projection to $151.1 million from $127.3 million."

The analyst also recognized the "significant surprise" in Novartis' collaboration with "the Centers for Medicare and Medicaid Services (CMS) to bring forward an outcomes-based payment approach. Specifically, this approach would allow for payment 'only when pediatric and young adult ALL patients respond to Kymriah by the end of the first month.'"

"With continuing, almost global, pushback on the increasing costs of oncology drugs, Novartis is truly breaking significant ground, in our belief," Pantginis commented.

Want to read more Life Sciences Report articles like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.

1) Tracy Salcedo compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following company mentioned in this article is a billboard sponsor of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

Want to read more about Regenerative Medicine and Biotechnology / Pharmaceuticals investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe