William Blair & Company Initiates Coverage of Three Biotech Companies

Thursday, March 14, 2019

William Blair & Company issued a comprehensive report on allogenic cell therapies and initiated coverage of three companies participating in this area: Allogene Therapeutics, Inc. (ALLO $28.26), Cellectis S.A. (CLLS $18.36), and CRISPR Therapeutics AG (CRSP $39.04).

In his detailed report, analyst Raju Prasad wrote that "with the robust efficacy of autologous chimeric antigen receptor (CAR)-T-cell therapies to date (Novartis's Kymriah and Gilead's Yescarta approved in the U.S. and E.U. and CAR-T cells targeting B-cell maturation antigen [BCMA], such as Celgene/bluebird bio's bb2121, showing impressive clinical results that will likely lead to regulatory approval in fourth-line multiple myeloma in 2020, with earlier lines potentially thereafter), the focus has shifted to commercial issues related to vein-to-vein time, manufacturing variability, shipping/chain-of-custody issues, and scalability over the long term. Allogeneic cell therapies (derived from a healthy donor) have the potential to address these issues by providing an enhanced speed to patient, availability, decreased cell variability, and streamlined manufacturing efficiencies. With a recent influx of investment in the space, we believe that the next phase of growth in the widespread use of cell therapies will be catalyzed by the successful development of these 'off-the-shelf' modalities."

Prasad said he views Allogene as a "core holding for investors looking for exposure to innovation in this subsector with de-risked initial targets and indications."

"ALLO-501, Allogene's anti-CD19 allogeneic CAR-T, uses refined manufacturing and pre-conditioning processes with a proprietary anti-CD52 antibody (ALLO-647) that has shown potential to increase engraftment," he said. "Data from the company's Phase I trial is anticipated in first half 2020. UCART19, a partnered product with Servier, is an anti-CD19 allogeneic CAR-T being developed for ALL with promising data from a pooled analysis presented at ASH 2018: 82% CR/CRi with a lymphodepletion regimen of fludarabine, cyclophosphamide and alemtuzumab. We model $1.7 billion revenue for ALLO-501 in NHL and $483 million for UCART19 in ALL by 2030."

Prasad said that in addition to Cellectis' collaboration with Servier/Allogene, the company has its own wholly owned pipeline of allogeneic CAR-T therapies. "We see the company's UCART22 to be the most intriguing product in the wholly owned pipeline. This viewpoint stems from data on clinical remissions in patients treated with an autologous CD22 CAR-T that relapsed after treatment with CD19 CAR-T. Therefore, UCART22 could become a first-in-class allogeneic cell therapy for CD19-negative relapsed patients in ALL and NHL."

CRISPR Therapeutics is focused on developing innovative therapies for serious diseases using CRISPR/Cas9 technology.

"The company's lead candidate, CTX001, co-developed with Vertex Pharmaceuticals, is an autologous CRISPR/Cas9 edited hematopoietic stem cell therapy being studied in a Phase I trial for the treatment of β-thalassemia and SCD," Prasad said. "CTX001 aims to upregulate fetal hemoglobin (HbF) to treat the underlying hemoglobin pathophysiology. Preclinical studies using healthy donor cells have shown CTX001 modifies over 90% of cells and increases HbF by over 30%. The company's pipeline also contains three, allogeneic, CRISPR-edited CAR-T products: CTX110 (anti-CD19) for the treatment of CD19+ malignancies such as NHL and ALL (clinical trial guided for initiation in first half 2019), CTX120 (anti-BCMA) for the treatment of MM, and CTX130 (anti-CD70) for the treatment of solid tumors and hematologic malignancies."

William Blair is a premier global boutique with expertise in investment banking, investment management, and private wealth management. We provide advisory services, strategies, and solutions to meet our clients' evolving needs. As an independent and employee-owned firm, together with our strategic partners, we operate in more than 20 offices worldwide.*

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*Includes strategic partnerships with Allier Capital, BDA Partners, and Poalim Capital Markets.

William Blair or an affiliate does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. This report is not intended to provide personal investment advice. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments, or strategies to particular clients. The recipient of this report must make its own independent decisions regarding any securities or financial instruments mentioned herein.

William Blair or an affiliate is a market maker in the securities of Allogene Therapeutics, Inc., Cellectis S.A., and CRISPR Therapeutics AG.

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