PSTX - Poseida Therapeutics: Non-Self CAR T Looks To Be Safe And Potentially Impactful

2023-12-21 08:06:15 ET

Summary

• Poseida Therapeutics is an oncology-focused biotech specializing in the development of cell therapies, particularly CAR T-cell approaches for multiple myeloma and acute leukemia.
• They have demonstrated promising early results in their clinical trials, with high response rates and manageable side effects. Particularly with respect to GvHD.
• The company also has gene therapy programs in development and has strong financial reserves to continue operations for several more quarters.

Topline Summary

Poseida Therapeutics (PSTX) is an oncology-focused biotech specializing in the development of cell therapies, most notably novel CAR T-cell approaches for multiple myeloma and acute leukemia. They've demonstrated very intriguing early promise, deep cash reserves, and a talent for cultivating big pharma partnerships. This to me makes them a potential bargain heading into 2024, and one worth considering further.

Pipeline Overview

PSTX currently has 3 CAR T-cell therapies in clinical trials. Each of these is built on a different platform than what currently approved CAR T therapies use. The PSTX platform is to take healthy, donor-derived T cells to insert the chimeric antigen receptor. A modification to the T cell receptor gene is intended to reduce the risk of graft-versus-host disease that is a significant challenge for all of these donor (allogeneic) products.

The main hope for using allogeneic products is that it can come from a healthy patient, which should help with manufacturing and overall potency (since the patient has not had one or more rounds of potentially immune-damaging chemotherapy), in addition to being more universal, off the shelf, hopefully increasing access for patients overall.

Specific candidates currently in trials include:

P-BCMA-ALLO1

The primary allogeneic CAR T-cell therapy being developed by PSTX is P-BCMA-ALLO1 , with the main target of interest being BCMA, an important antigen expressed by multiple myeloma cells, in particular.

PSTX presented early-stage findings for this product at ASH 2023, including 39 patients enrolled in the intention-to-treat population of their phase 1 study. All of these patients had multiple myeloma that was relapsed or refractory following standard therapies. It took a median 7 days to undergo treatment with P-BCMA-ALLO1 after enrollment, highlighting the rapid treatment time compared with approved CAR T-cell therapies, which take more like 3 weeks or longer from the time of leukapheresis to treatment.

Response rates ranged from 80% to 100% in the different patient cohorts, and in particular the researchers noted that all patients in the first two cohorts (totaling 9 patients in the analysis) had a response if they did not have prior anti-BCMA antibody therapy. Furthermore, no graft-versus-host disease was noted in the analysis, and cytokine release syndrome was manageable and low grade.

P-CD19CD20-ALLO1

This CAR T-cell product is designed to incorporate 2 different chimeric antigen receptors: one targeting CD19 (a now-classic target for CAR T-cell therapy in acute lymphoblastic leukemia and non-Hodgkin lymphoma), and the other CD20 (currently exploited in B-cell malignancies using antibodies like rituximab and obinutuzumab).

This program is being developed in collaboration with Roche, and PSTX has guided that they anticipate beginning clinical trials early in 2024.

P-MUC1C-ALLO1

This allogeneic cell therapy is designed to exploit expression of mucin 1-C, which is upregulated in various forms of cancer . PSTX has an ongoing phase 1 study in patients with a variety of advanced or metastatic solid tumors, with very little data to date.

One report we do have from SITC 2022 provided information on 3 patients enrolled to date. PSTX reported that the therapy was well tolerated, again with no graft-versus-host disease being observed. They anticipate sharing a more robust data readout at a meeting in 2024. My guess would be either AACR in early April or the ASCO Annual Meeting in early June.

Gene Therapy Programs

PSTX is also working on several gene therapy programs to potentially address diseases including Hemophilia A, urea cycle disease, and phenylketonuria. These are all still in preclinical study and were being developed in collaboration with Takeda, but that agreement ended in June . The company is evaluating these platforms to see which, if any, are still suitable for internal development.

Financial Overview

Per their Q3 2023 filing, PSTX held $252.7 million in total current assets, including $25.5 million in cash and equivalents, as well as $213.3 million in short-term investments. They reported $9.4 million in collaboration revenue, set against $45.6 million in operating expenses. After other income accounted for, the net loss for the quarter was $31.8.

Given this cash burn, PSTX holds enough funds to continue operation for another 7 to 8 quarters, assuming losses hold steady.

Strengths and Risks

PSTX has shown some very exciting early signals of activity in the myeloma space, giving a fairly clear picture about the safety, especially the encouraging lack of graft-versus-host disease. This is one of the most important complications of allogeneic transplantation, and it appears as though the platform they're using has successfully mitigated its risk.

That said, this is still early days for all of their therapies, so it would be getting way ahead of ourselves to hype up these results too much. There's very little we can make of the efficacy findings in myeloma, where they've shared the most data, since the study cohorts are so small and subject to noise. So we're sitting in a very nebulous zone where anything can happen with these CAR T-cell programs. And so far we have seen almost no success in the solid tumor CAR T-cell space, particularly using mucin as a target.

To me, it appears that cash is not a near-term problem, either. Certainly, we'll need to see more funding at some point, given how long the timelines can be in oncology. But PSTX has already demonstrated a pedigree of fostering collaborative partnerships, and that has not slowed down as companies like Astellas have deepened their financial commitments . Anyone buying in today should expect dilution in some form, but they have the time to reach a potentially strong data readout that would enable a common offering from a position of strength.

Bottom-Line Summary

Every investment in a development-stage biotech is weighing the current valuation against the potential promise. A lot of great-looking early biotechs have almost all of their potential (if not more) baked into the market cap. Some fly a bit under the radar. My impression of PSTX is that it is currently being underestimated by the market. If they can provide some more signals that the ALLO1 platform is nailing the efficacy question, then they have multifold potential for growth from their current valuation (around $300 million at the time of writing).

For me, this is a tentative buy based on that valuation versus the promise and backing that PSTX has from bigger companies. There is definitely the risk of a negative data readout, which would send the stock much lower, but anything more positive than what we've seen would mean that PSTX is currently at a floor in its valuation, if you take a longer horizon.

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