Caribou Biosciences: Upcoming CB-010 Data Could Send The Bears Packing (NASDAQ:CRBU)

The bears of the biotech sector have not spared Caribou Biosciences (NASDAQ:CRBU). In July the corporate introduced a $25M fairness funding from Pfizer (PFE) adopted by compelling scientific information from a trial of its next-gen CAR-T remedy, main the inventory to rally over 100% in a few week. A 50% sell-off within the 4 months since nonetheless, led the inventory again the place it began. In early November, the inventory rallied once more however light with earnings. A late November run is now underway, however will this rally fade too? This text takes a glance.

Determine 1: 12 months-to-date buying and selling of CRBU. Be aware a current rally with earnings additionally quickly light.

CRBU’s allogeneic CAR-Ts

The primary optimistic of CRBU is the platform, CRBU makes use of a type of CRISPR gene enhancing to create next-generation chimeric antigen receptor T-cells (or CAR-T) which may kill a affected person’s most cancers cells. CRBU’s CAR-Ts are allogeneic CAR-Ts, so do not require harvesting cells from the affected person being handled (not like with autologous CAR-Ts).

Though that is solely a little bit of a unfavorable, of CRBU’s three CAR-T therapeutics on the scientific stage, CB-010 is essentially the most superior and has solely reported information from 16 sufferers with relapsed or refractory B cell non-Hodgkin lymphoma (r/r B-NHL). That trial known as the Antler part 1 examine.

ANTLER: A part 1 examine of CB-010

Concerning the information to this point, whereas we’re caught with cross-trial comparability, and can most likely be caught in that state of affairs for a while to come back, CRBU’s information do look spectacular. Notably, the corporate produced a 94% total response fee (ORR, 15 out of 16 sufferers) and 44% of sufferers had a whole response at ≥6 months.

In CRBU’s November Company Presentation, the corporate notes a six-month full response fee of 44% compares favorably to numbers seen with autologous CAR-T therapies, which are not as handy as allogeneic CAR-T therapies.

Outdoors of the efficacy comparability to accredited autologous CAR-T therapies, CB-010 sees diminished charges of key opposed occasions like infections and cytokine launch syndrome, in comparison with autologous CAR-Ts.

Timing of future catalysts

The Antler information aren’t actually new at this level, the rally they supplied has light, so one other replace could be supreme. CRBU has proceeded to the dose enlargement portion of the CB-010 Antler part 1 examine, specializing in second-line relapsed or refractory massive b-cell lymphoma sufferers (r/r LBCL). Whereas CRBU guides for preliminary information from that cohort in H1’24, which on the planet of biotech would typically imply Q2’24 or with timeline slippage, mid-2024, which may find yourself that means Q3’23, I feel the outcomes may come a little bit sooner than that.

For instance on Might 31, Bret Jensen put out an article titled, “Caribou Biosciences: Like Watching Paint Dry” during which Jensen lamented the gradual tempo of pipeline progress. Certainly on the time, corresponding to with Q2’23 earnings, introduced on Might 9, CRBU had guided to a security and efficacy replace in H2’23 from the Antler examine. That replace ended up approaching July 13, 2023, so it’s stunning the corporate did not merely information to Q3’23.

Additional, on March 29, 2023, CRBU introduced the corporate had entered the dose expansion portion of the Antler examine. That portion plans to enroll about 30 sufferers (15 receiving therapy with 80 million cells, and 15 sufferers receiving therapy with 120 million cells). Nonetheless, whereas we’re getting information from 30 sufferers, as an alternative of 16 this time, CRBU has beforehand been conservative with steering on timelines, and the dose enlargement can have been ongoing for eight months (April to December, inclusive) by the beginning of 2024. It ought to be famous that CRBU has now centered on the subset of r/r B-NHL sufferers with r/r LBCL, however that subset was 10 out of 16 sufferers within the information reported in July, so enrolment would not be restricted too severely. Taking all this collectively, a Q1’24 readout would not appear out of the query.

CB-011 and CB-012

Outdoors of CB-010, CRBU has accomplished dosing with CB-011, one other remedy from its CAR-T pipeline, on the first stage in its part 1 CaMMouflage trial in a number of myeloma, however would not report any efficacy information in its current releases. As such it’s arduous to make any predictions about how CB-011 would possibly carry out. Notably, CB-011 is already enrolling on the second dose stage (150 million CAR-T cells) following no dose limiting toxicities in three sufferers handled with the primary dose stage (50 million CAR-T cells). The potential of information from the primary six or so sufferers (three at every dose stage) in 2024 appears believable.

CRBU’s third CAR-T remedy is a little bit additional behind, nonetheless. CRBU solely just lately acquired Investigational New Drug (IND) clearance for CB-012, so the remedy is now able to enter part 1. CRBU’s corporate presentation notes the corporate plans to provoke affected person enrollment in its trial of CB-012 in mid-2024, so it won’t present any efficacy information till 2025, in my estimation.

Monetary Overview

CRBU raised $134.4M by an underwritten providing in Q3’23, which whereas being a key improvement funding-wise, has clearly weighed on the inventory. Web money, money equivalents and marketable securities have been $396.7M on the finish of Q3’23, which the corporate expects to fund operations in This autumn’25. R&D bills have been $28.6M in Q3’23 and G&A bills have been $9.7M in the identical quarter. CRBU reported a internet lack of $10M for Q3’23 and internet money utilized in working actions was $71.9M within the first 9 months of 2023. At that fee, and contemplating CRBU’s present money steadiness, the corporate may proceed operations for 4 years. Clearly, with CRBU’s different applications getting underway in earnest, money burn goes to choose up with elevated R&D expense, so it’s price deferring to CRBU’s steering of money lasting into This autumn’25.

There have been 88,431,136 shares of CRBU’s frequent inventory excellent as of November 2, giving the corporate a market cap of $500.5M. There have been additionally 9,523,394 choices excellent with a weighted common train value of $8.06.

Abstract, Score and Dangers

The CB-010 information to this point, which though solely coming from solely 16 sufferers to this point, present vital validation of CRBU’s know-how (CRISPR edited allogeneic CAR-T). Additional, the corporate’s earlier conservative steering on reporting outcomes, and the truth that dose enlargement work started in late March, creates the likelihood that an replace from the dose enlargement portion of the Antler examine won’t be far-off. Given earlier optimistic information, my expectation of a near-term replace from the Antler examine (which I count on to be optimistic), one other shot on objective with early CB-011 information seemingly in 2024, and money extending till late 2025, I fee CRBU as a purchase. Additional, with a large increase of money out of the way in which in Q3’23, the percentages of a near-term increase of money weighing on the inventory are diminished.

The obvious danger I see to CRBU near-term could be an replace on FDA discussions relating to a pivotal trial of CB-010 in second-line LBCL sufferers. CRBU has said it plans to share the FDA’s suggestions on this matter by year-end 2023. If suggestions relating to the design of that trial is not nicely acquired by the market (corresponding to a larger-than-expected pivotal trial being wanted, or a extra dangerous design being required) the inventory would seemingly fall.

Past year-end 2023, information from CB-010 may fail to provide the identical excessive full response fee seen at six months with the primary sixteen sufferers. A softening of the information could possibly be considered as anticipated, however nonetheless affirm the worth of CB-010, or it could possibly be considered as disappointing by the market. For instance, if the whole response fee at six months drops under present CAR-T therapies, the argument for CB-010 would focus on potential advantages like security, comfort, and price, relatively than efficacy. Given the competition within the CAR-T house, CB-010 would possibly fall out of favor and CRBU’s inventory may fall.

Lastly, whereas I do not assume a lot expectation exists for CB-011 but, dose escalation research can produce dose-limiting toxicities and the announcement of such toxicities or different points with the remedy would trigger the inventory to fall.