2023-04-27 16:49:51 ET
Summary
- IND clearance achieved to initiate a phase 1/2 study using CABA-201 for the treatment of patients with systemic lupus erythematosus.
- The global lupus drugs market is expected to reach $3.6 billion by 2029.
- The phase 1/2 DesCAARTes trial is using a CAR-T to treat patients with mucosal pemphigus vulgaris; 1-month results 1st half of 2023, with 6-month data expected 2nd half of 2023.
- The phase 1/2 MusCAARTes trial is using a CAR-T to treat patients with myasthenia gravis; 6-month data expected by the 1st half of 2024.
Cabaletta Bio (CABA) is a great speculative biotech play to look into. That's because it received clearance from the FDA to initiate a phase 1/2 study using CABA-201 for the treatment of patients with systemic lupus erythematosus [SLE]. Not only does the use of this clinical product have potential in being able to treat this patient population, but it might be able to be used towards other autoimmune diseases. The reason why I want to bring up this biotech is because even though it just received clearance in being able to use CABA-201 for the treatment of patients with systemic lupus erythematosus, it expects to release initial data from this trial by the 1st half of 2024. This biotech also has additional shots on goal, which are a combination sub-study known as DesCAARTes trial and then another one known as MusCAARTes trial. Each of these trials are using CAR-Ts to treat patients with mucosal pemphigus vulgaris and myasthenia gravis respectively. Results from these early-stage studies are expected to be released in 2023/2024.
CABA-201 For The Treatment Of Patients With Lupus And Lupus Nephritis
Cabaletta Bio was able to in-license a clinical candidate by the name of CABA-201 for the treatment of patients with autoimmune disorders. However, it received IND clearance from the FDA to initiate a phase 1/2 study using CABA-201 for the treatment of patients with SLE. This includes both active lupus nephritis [LN] or active SLE without renal involvement. Lupus Nephritis is an autoimmune disease . There are two types of lupus, however, LN occurs when the kidneys are affected. That's because the small blood vessels that filter your wastes glomeruli and the kidney itself has inflammation. As you can see, this disease is not good on your kidneys at all. These are some of the symptoms that are associated with the disease:
- Proteins in the Urine
- Blood in the Urine
- Edema - fluid that kidneys can't remove from the body
- weight gain from excess fluid
- High blood pressure
The worst part of all is that eventually the disease can lead to kidney failure. That's bad because the only options are a kidney transplant or constant dialysis. This is only one part of the equation that Cabaletta Bio is going after. That's because what I mentioned here is lupus that affects the kidneys, however, lupus can affect other parts of the body such as the following:
- Joints
- Skin
- Blood cells
- Brain
- Heart
- Lungs
When looking at both lupus and lupus nephritis, the possible market to be tapped into is huge. Consider that the global lupus drugs market is expected to reach $3.6 billion by 2029 . This is a huge market opportunity for Cabaletta Bio, should it ultimately achieve FDA approval of CABA-201 for this indication.
Financials
According to the 10-K SEC filing , Cabaletta Bio had cash, cash equivalents and investments of $106.5 million as of December 31, 2022. It believes that it has enough cash on hand to fund its operations into Q1 of 2025. This estimate makes sense, because it burned through $54.1 million in cash in 2022. This is broken down into $39.3 million in development and expenses and then about $14.8 million for general and administrative expenses. With this cash burn each year, it should be able to fund its operations up to the estimate of Q1 of 2025. This is why I believe it shouldn't have a need to raise cash at all during this year. However, should it need to raise additional funds, then it might choose to do so by at least early 2024. Of course, it could also choose to raise additional cash after the release of positive results from either the DesCAARTes trial, which has the release of 1-month data in the 1st half of 2023 and then 6-month data expected in the 2nd half of 2023.
Risks To Business
There are a few risks that traders/investors should be aware of before investing in Cabaletta Bio. The first risk to consider would be with respect to the initiation of the phase 1/2 study using CABA-201 for the treatment of patients with SLE. There is no guarantee that once results are released for this particular study, that they will end up being successful. A second risk to consider would be with respect to the other ongoing studies, known as DesCAARTes trial and then another one known as MusCAARTes trial, which are targeting patients with mucosal pemphigus vulgaris and myasthenia gravis respectively. A final risk to consider would be with respect to the financials. That's because even though it states it has enough cash to fund its operations into Q1 of 2025, that doesn't mean it won't need to raise cash at a much earlier time point. A good time to raise cash might be in the beginning of 2024, but it's also possible that a cash raise might be done after the release of positive news. Being that preliminary results from the phase 1/2 studies of the DesCAARTes trial and the MusCAARTes trial are expected in 2023/2024, then it's possible that the company might choose to raise additional cash after the release of positive data from them.
Conclusion
The final conclusion is that Cabaletta Bio is a good speculative biotech play to look into. That's because it already received IND clearance to initiate a phase 1/2 study using CABA-201 for the treatment of patients with SLE. In addition, it has the other two ongoing studies which I noted directly above. These include the DesCAARTes trial which is using a CAR-T to treat patients with mucosal pemphigus vulgaris and then the MusCAARTes trial which is using a CAR-T to treat patients with myasthenia gravis. The 1-month safety/persistence data for the DesCAARTes trial is expected in the 1st half of 2023 and then the 6-month data from this study is expected in the 2nd half of 2023. The 6-month data relating to the ongoing MusCAARTes trial is expected to be released in the 1st half of 2024. With IND clearance to initiate CABA-201 in a phase 1/2 study for the lupus market, plus a few data readouts expected in 2023, these are the reasons why I believe that Cabaletta Bio is a good speculative biotech play to look into.
For further details see:
Cabaletta Bio: Speculative Biotech With Opportunity