#bellicum

At the beginning of this month, Texas based Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) offered up some insight into its ongoing phase I/II, BP-004, designed to test the efficacy and safety of its lead pipeline candidate, BPX-501. The data relates to what is set to become one of the most revolutionary (and most interesting, from a scientific standpoint) areas of modern healthcare and biotechnology – stem cell therapy. With the ethical debate seemingly over, at least from any actionable halting of progression being realistic, stem cell therapy is starting to take off. The US has a whole flurry of ongoing trials in a range of indications, and the number of approved therapies is growing fast. Japan, as part of Shinzo Abe’s economic stimulus policy, has essentially opened the floodgates to companies wishing to enter the space, offering tax curbs, subsidies and legal relaxation to stem cell relates investigations. In short, it’s going to be big, and while Bellicum is – at present – a relatively small player in biotech as a whole, it’s technology could feed into the space to a considerable degree, and the company could grow exponentially if BPX-501 can reach commercialization.

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We’ll address the update that the company gave shortly. More important (and more interesting) is the underlying science. Here goes.

There are two types of stem cell therapy – allogeneic (cells come from a donor) and autologous (cells come from the patient in question). The first is what looks set to be the most revolutionary, but it’s also fraught with difficulty. There are two primary difficulties. First, finding a match is tough. Second, to be effective, most stem cell treatments have to be issued after a systematic destruction of the patient’s immune system. This opens the path for infection and – more seriously – graft versus host disease (GVHD), in which the t cells introduced from the donor attach the cells of the patient undergoing treatment.

One way to overcome the first problem is to use what’s called a haploidentical donor, or a partially compatible donor – essentially, a close family member. A high percentage of family members match one another, at least to a certain extent, and donor cells can interchange effectively. Of course, the less identical the match, the higher the chance of GVHD, so we’re back to problem two, but this time an exaggerated version. This is where Bellicum comes in to the picture.

The company has designed what it calls its CaspaCIDe safety switch. When a patient undergoes a stem cell transplant from a haploidentical donor (in oncology, more often than not the transplant matter is bone marrow cells, as is the case here) they then receive BPX-501, which is a genetically modified version of the T Cells associated with the bone marrow being transplanted. The modification results in a sort of on/off switch, which can be activated at any time post-treatment. If the patient develops HVGD, a physician introduces an activation drug, and it turns the T Cells that are attacking the host cells off – stopping HGVD in its tracks.

The importance of this cannot be understated. A huge number of stem cell therapies are not undertaken purely based on the risk of the patient developing HGVD. If Bellicum can show that BPX-501 can remove, or even reduce, this risk, it’s a game changer.

Of course, it’s very early days. Safety and tolerability are the primaries as things stand, and there’s a long way to go before the company can claim any level of consistent efficacy. To date, however, things look ok. In the recent update, trials showed improved adaptive immunity in 17 patients. In a December update back at the end of last year, the same trial (ongoing) showed improved immune reconstitution in 39 patients, and actually completely reversed the onset of GVHD in one patient. Primary completion isn’t slated until November this year, and full completion won’t come until December 2018, so the path to commercialization is a long one, and topline likely wont hit until 2019. This said, Bellicum has so far been more than willing to share ongoing data with us, so while it may be a long road, there should be plenty of insight along the way.

All said, it’s probably far too early to say with any confidence that Bellicum is the company to carry this sort of T Cell suicide switch to commercialization. Having said this, it’s definitely a company to keep an eye on, in a space set to change the way we treat some of the most common global diseases over the next two decades.

Here at Market Exclusive, now and again we like to uncover small caps in the biotech space, and put them under scrutiny. Last week, Bellicum Pharmaceuticals, Inc. (NASDAQ:BLCM) announced it had been selected for inclusion in the NASDAQ Biotechnology (NASDAQ:^NBI). The company is very much in the development stage of its growth, but its inclusion on an index like the NBI (for some) will serve as validation of its potential. We know how volatile the space can be, however, so let’s take a look at Bellicum’s lead candidate in an attempt to gauge its potential.

Ballicum’s lead candidate is BPX-501. To get an idea of how the drug works, and what it is designed to treat, we’ve first got to look at what’s called hematopoietic stem cell transplantation (HSCT). For a number of late stage blood and bone marrow cancers, HSCT is the standard of care treatment. Physicians take stem cells from bone marrow (usually a patient’s, but sometimes from a donor) and store them, while the patient undergoes chemotherapy to the point that the stem cells responsible for producing blood cells are completely destroyed. This concurrently destroys the cancerous cells in the blood, and once complete, the physician grafts (reinserts) the previously extracted stem cells, which replenish the patient’s healthy blood cells. Simple. But there’s a problem. More often than not, a host’s own stem cells can’t be used. To overcome this, a type of HSCT called haploidentical HSCT is employed – essentially a physician uses stem cells from a close relative. However, this means the graft is extremely dangerous – it can lead to what’s called Graft versus Host Disease (GvHD), which is where T cells from the relative attack the host’s vital organs. This means that while the treatment is effective, it is often not used due to its associated risks. This is where Ballicum comes in to the picture.

The company has developed what it calls a CaspaCIDe safety switch, and has incorporated the switch into BPX-501. A patient takes BPX-501 after they undergo HSCT, and the drug sits dormant in their bloodstream. If the patient develops GvHD, they take a second drug, rimiducid, which activates BPX-501. When activated, BPX-501 induces apoptosis (programmed cell death) in the non-host T cells, which stops them from attacking the organs associated with GvHD.

The drug is currently undergoing four separate phase I/II trials, in both the US and Europe, having performed well in two trials over the last few years, DOTTI and CASPALLO. Topline is expected during 2017 from the first two trials, and about twelve months later for the second two. If we can get a repeat of the demonstrated efficacy in the ongoing phase I/II, the company will be ready to kick off what will likely turn out to be a pivotal phase II/III, and submit an NDA sometime around 2019. So, with these timeframes, this is a pretty long game allocation. This doesn’t mean, however, that there wont be any catalysts near and medium term. The nature of the trials – one patient, one treatment – offers up the potential for repeat interim data releases. Whether the company will opt for this approach (as opposed to a topline dump post-completion) remains to be seen, but if it does, Ballicum could be a nice volatility play over the coming 24 months.

So what’s the verdict? Is the company worthy of its recent addition to the Nasdaq index? Well, as mentioned, near term it is difficult to make any solid predictions as to the likelihood of approval for BPX-501, and in turn, success for Bellicum. We can say, however, that the drug looks promising, and is a prime candidate for both orphan designation and accelerated approval. Along with the remaining candidates in Bellicum’s pipeline, there is the potential for triple digit million dollar revenues; revenues that wont start to roll in before the end of this decade, admittedly, but the potential is there nonetheless.

As a speculative allocation, Bellicum looks intriguing. There is risk, of course, with the stock being such a long term play. The clinical development space can be unpredictable and, especially when dealing with something as deadly as GvHD, there is plenty of room for slip ups. Having said this, the market currently values the company at a little over $500 million, which looks low when considered against its cash and equivalent number of circa $100 million, on a burn rate of $10 million. One to watch.