The moment the new IPO NantKwest (NK) landed in the town of publicly traded firms, some called it the “New Golden Boy”. During the IPO, investors who knew about this firm and were waiting for that day seemed confident that the stock would surge. As a matter of fact, the stock did surge.
On July 27, NantKwest, Inc. (formerly Conkwest, Inc.), Issued a press release announcing the pricing of its initial public offering of 8,288,000 shares of its common stock at a price to the public of $25 per share. The stock rallied closing at $34.65 up $9.65.
Wall Street Journal described NantKwest’s IPO as the highest ever for a biotech company with no approved drugs. The new firm raised approximately $265 million on sale of the 8.3 million shares.
In the days that followed though, NK gave back around $5 to profit taking. At the end of the trading week, Friday July 31, the stock closed at $30.60 with a market cap $2.14, down a little less than half a billion dollar since the IPO, day, which is still high compared to the average IPO stocks’ values.
NantKwest is a clinical-stage immunotherapy company. Its approach differs from those used by the immunotherapy firms that have become the talk of the world, changing the way cancer has been treated. Unlike conventional cancer treatments, immunotherapy treatments are not designed to kill cancer. They rather empower the immune system to seek and find cancer cells and eliminate them.The difference between NantKwest approach and the current immunotherapy approaches is that NantKwest uses and depends on the immune system’s natural killer (NK) cells to do the miracle, while the other approaches empower the T cells to do the job.
NantKwest is calling its natural killer (NK) cell based platform unique. The reasons is that nobody else is yet prepared to use this approach and that NantKwest proprietary process has demonstrated proof of concept and initial successes in growing the active natural killer cells and turning them into an effective biological cancer therapy. The NK treatment kills the cancer or the infected cells through the following modes of action:
1. DIRECT KILLING: Using activated NK cells (aNKs) that release toxic granules directly into the cell through cell-to-cell contact.
– NantKwest’s proprietary activated Natural Killer (aNK) platform is based upon highly potent Natural Killer cells from a unique cell line, harnessing the power of the innate immune system.
– Unlike normal NK cells, NantKwest activated NK cells do not express Killer Inhibitory Receptors (KIR), which diseased cells often exploit to evade the killing function of NK cells.
– NantKwest has optimized its aNK, cells, which lack the inhibitory receptors while retaining the broad array of activating receptors, which enable the selective targeting and killing of diseased cells.
– aNK cells carry a larger pay load of granzyme and perforin containing granules, which enables them to deliver a far superior payload of lethal enzymes to multiple targets.
– Using its know how, NantKwest is developing means through which its aNK cells can be grown at commercial scale as on-demand, ‘Living Drug in a Bag’.
Safety studies of aNK cells in dozens of patients treated in Phase I clinical trials have been conducted on various advanced blood and solid cancers. Encouraging evidence of safety, activity and prolonged survival have been demonstrated. Based on these clinical trials,
2. ANTIBODY-MEDIATED KILLING: Using high affinity natural killer cells (haNKs), which are NK cells engineered to incorporate a high affinity (ha) receptor that binds to an administered antibody, enhancing the cancer cell killing effect of that antibody.
Studies have shown that perhaps only 20% of the human population uniformly expresses the “high-affinity” variant of CD16, which is strongly correlated with more favorable therapeutic outcomes compared to patients with the “low-affinity” CD16. Additionally, many cancer patients have severely weakened immune systems due to chemotherapy, the disease itself or other factors.
NantKwest has modified haNK cells to express high-affinity CD16. As such, haNK cells may potentiate the therapeutic efficacy of a broad spectrum of antibodies directed against cancer cells. The firm is advancing haNK with plans to initiate the first clinical trial in 2016.
3. TARGETED ACTIVATED KILLING: Using targeted activated NK cells (taNKs), which are NK cells engineered to incorporate chimeric antigen receptors (CARs) to target tumor-specific antigens found on the surface of cancer cells.
Chimeric antigen receptor (CAR) technology is among the most novel cancer therapy approaches currently in development. CARs are proteins that allow immune effector cells to target cancer cells displaying specific surface antigens.
taNK is a platform in which the firm’s aNK cells are engineered with one or more CARs to target proteins found on cancers and is then integrated with a wide spectrum of CARs. This strategy has multiple advantages over other CAR approaches using patient or donor sourced effector cells such as autologous T-cells, especially in terms of scalability, quality control and consistency.
NantKwest most advanced taNK cell line expresses a CAR for ErbB2 (also known as Her2), a protein commonly found on breast, ovary, gastric, bladder and medulloblastoma (brain) cancers. Other taNK programs are in various stages of development.
According to NantKwest, the aNK, haNK and taNK platforms address certain limitations of T cell therapies used by other immunotherapy companies. These include:
– Reduction of risk of “cytokine storms” reported after T cell therapy.
– The treatment is “off-the-shelf” therapy, NantKwest’s NK cells do not rely on the patients’ own often compromised immune system.
Some Preliminary results: According to the Company, in Phase 1 clinical trials in patients with late stage cancer, NK cells have been successfully administered as an outpatient infusion therapy without severe side effects, even at doses of 10 billion cells.
Why Investors’ Great Enthusiasm?
1. Learning about a new powerful different immunotherapy.
Followers on the biotechnology evolution recognize the fact that Immunotherapy for cancer is currently the hottest topic in the drug sector. There is no doubt that immunotherapeutic novel disciplines are making a radical change in the management of cancer. Before this firm’s platforms surface as powerful immunotherapy, two immunotherapy approaches have already demonstrated unique efficacy in treating advanced cancers and saving lives.
The first is monoclonal antibodies that inhibit immune checkpoint proteins on the surface of T lymphocytes.Normally, these immune checkpoint proteins aim at limiting the immune system aggression on normal healthy cells. The problem is that cancer cells utilize them to limit the capability of the T-cells of recognizing and attacking them. The monoclonal antibody inhibitors of the immune checkpoint proteins have already saved the lives of condemned advanced cancer patients.
The CAR T Cells Approach: A few companies are filling their pipeline products with candidates for advanced solid and hematological cancers. Their approaches aim at genetic engineering of T cells to express either chimeric antigen receptors (CARs), or T cell receptors (TCRs). The most highlighted firms include Juno (JUNO), Kite (KITE), Bellicum (BLCM), Ziopharma (ZIOP), AdaptImmune (ADAP) and others. Early miracle cures happened, using these immunotherapy approaches, which increased investors’s enthusiasm.
Stocks of these firms have rallied during and following these firms’ IPOs. It seems that NantKwest (NK) rally during the IPO surpassed all these firms’ rallies.
2. NantKwest’s immunotherapy approach as presented might have added to investors’ enthusiasm with immunotherapy. It led them to expect more and miracles from this novel use of the immune system’s NK cells as treatment for cancer and infection.
3. The gigantic expectation about NantKwest immunotherapy approach is also attributed to the presence of Patrick Soon-Shiong, M.D., FRCS, FACS as Chairman & Chief executive officer of this firm. Dr. Soon-Shiong is a physician, surgeon, scientist and successful entrepreneur. His work, which includes novel therapies for both diabetes and cancer was published over 100 scientific papers, and has over 95 issued patents on groundbreaking advancements in many fields. He was behind creating new drugs and founding new biotech firms all have been successful.
To see Dr. Soon-Shiong’s profile Click HERE
Taking at face value all that’s said about the advantages of NantKwest’s NK approaches to immunotherapy does not guarantee a 100% success of the products before conducting mid- and late-phase clinical trials. That’s why companies have to conduct these trials before getting approvals.
NantKwest hypothesis is accurate and the work it accomplished towards developing the NK treatment is fascinating. The firm has obtained some proof of concept from data from early experimentation. However, although everything seems great, all that does not necessarily guarantee success, or superiority over the currently highlighted immunotherapy approaches.
We have seen miracles with the immune checkpoint protein inhibitor combination drugs on condemned patients with advanced cancers and we are expecting more improvements in the treatments of a variety of advanced cancers with more results coming from clinical trials of combination drugs. Scientists and oncologists are increasingly capable of recognizing the reasons for the success or failure of certain drugs on certain individuals and can now pick the right treatment for the right patients. The same can be said about the CAR T cell and T cell receptors (TCRs) approaches – all have already come up with some miraculous positive results and all the firms behind them are improving on their technologies and doing whatever it takes to overcome problems and prevent the side effects.
Serious analysts are also enthusiastic with NantKwest natural killer cells’ approach, yet, most of them are reminding investors that it could take years before NantKwest could think of seeking regulatory approval for the NK cells.
Boris Peeker, a biotech analyst with Cowen & Co. told the same to the Los Angeles Times. He speculated that one reason investors were attracted to NantKwest was the persona of Partick Soon-Shiong as the head of the firm, “Patrick is a successful biotech entrepreneur. When people look for who to invest with, having somebody who’s a local billionaire and seems to believe in this is an encouraging sign,” Peaker told the Times.
Nevertheless, it is good news for now that NantKwest is moving into Phase 2 clinical trials with its NK cells as a treatment for Merkel cell carcinoma.
Soon-Shiong himself said, “It’s very early times for us, but this has literally been decades in the making. He would not say when the company might gain regulatory approval for its cancer therapies, replying, “It’s way too early to speak about that.”
We too believe in the value of the NK approach to immunotherapy. Yet, we also believe in the current successful immunotherapy approaches that have already saved lives. As a matter of fact, we need all those approaches to succeed. Our long-term experience taught us that cancer is a very clever nasty disease that no one treatment can alone offer a cure.
We might soon add this firm to our immunotherapy group. It just needs us to do a little bit more homework.
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