I will preface this whole post by saying please read all of this.
Raibens Rules of Pharma:
1 - Everything is a Gamble
2 - Conservative Positions
3 - Know what you are buying
4- Take Profits
Alright, Allogen Therapeutic, what the hell is going on here? Let’s start with what they are trying to do to give everyone a brief overview of what is going on: CAR T cells are a commercially viable and approved method of treating various diseases, especially cancers, and have been on the market for several years. The premise is, you take someones T cells, supercharge them, grow a bunch of them, and then put them back in a person to help kill off whatever is fucking their life up at the moment. It’s a lot like stem cell or bone marrow transplants that patients get, using their own cells so that there is less chance of rejection etc. This is the basic premise and will serve as a fundamental process to explain what Allogen is trying to do and why.
Here’s the problem with CAR T cell therapy as it has been done in the past: people who have gone through chemo, radiation, and god only knows what else don’t have a lot of T cells to harvest in the first place, and without a certain amount, you can’t make a treatment for them. So the next question is, how do we get more so we can give people treatment? Get them from healthy people, supercharge those ones, and stick them in the sick people, that’s how! This is something that has been trialed quite a bit and serves as a 2nd line or backline option for people who haven’t responded or responded well to other treatments. The issue is that when you use donor A’s cells in patient B, there is an increased risk of a cytokine reaction (same sorta thing with covid) and that’s bad.
However if it’s your last resort, why not roll the dice right? That’s basically the Idea, and the principle is sound, but it is required to be safe and effective. Some of you have heard of or saw the news article about CRISPR being a better option, and that’s actually likely to be true, but CRISPR is a 1st line treatment option, basically the first bite at the apple, this is closer to the last when other stuff doesn’t work. Why do I bring this up? Mostly just to show that the treatment does have its place and can be valuable, assuming safety and efficacy is shown.
Now to the bugbear again, that damn FDA hold (or after PTGX, perhaps that glorious hold? IDK), the trial was held because after “manufacturing”(the word I’m going to use to encompass the process of altering and then growing/cloning the T cells) one of the newly made cells had a chromosomal anomaly and caused a severe reaction. This was a pretty big problem for the patient it happened to (they did recover as far as we can tell), and a big problem for us, here’s why:
If the anomaly was in the donor sample, the company could add screening requirements or just not use that donor anymore, and this would be a pretty simple fix, just requiring new safety standards and observation. The issue is that the anomaly happened after manufacture, which means that this is a potential issue with their manufacturing process. This is actually pretty evident when you take a look at what the FDA holds itself encompasses, which is the whole company, not the drug. This is rough news, and I’m not sure many people have noticed it, and I am also thinking people might have seen PTGX and just thought it would be a 3 week hold and we’re off to the moon! That’s not what is going to happen here.
The FDA identified a potential problem in the manufacturing process or facilities that Allogen uses, this caused them to shut down ALL Allogen CAR T manufacturing, full stop. I don’t know if the stock reflects that fact, but that’s what has actually happened, and I expect some volatility in the near future.
I’m going to break down the scenarios here moving forward, and then give a recommendation based on what I expect right now (13OCT2021)
The good: CAR T studies get put on hold all the damn time. This actually happens a lot, and is almost expected to some extent, so not actually that abnormal. To top it off, manufacturing process issues are one of the big reasons they get put on hold as well, so again, not abnormal. In fact a lot of CAR T studies that get put on hold get back on track as well (Remember I said read to the end, so make sure you do that). How that fact will affect stock price during the hold, I have absolutely no idea, but something to keep in mind.
The Bad: This wasn’t an issue with just one CAR T study for Allogen, it affected all of them, and there isn’t a great way to know how they are progressing in solutions until they have figured it all out. Basically, I’m telling you like I say with all Pharma plays, it’s a gamble with (somewhat) indeterminate timing.
The Ugly: This could go tits up completely, investing in a hope for this to work out could lose you everything you put in because this isn’t just about a single study/drug, it’s affected most of the company, so a negative outcome will be a really negative outcome.
Breakdown as of 13OCT 2021 -
All of the above being said, I think this might be a play in the future, the issues they are running into doesn’t strike me or the people who are smarter than me that I ask to explain medical shit to me, as something that will hold this up forever. In fact I do expect that we will see this trial and company get back at it eventually. But I said eventually, and I do mean that. Please remember that PTGX was a perfect storm, and we didn’t have to wait long because of that, this one? not so much. Based on other CAR T holds, and the severity of this one, I don’t expect it to pop for a few months at the earliest, and on the worst side of that, It could easily be a year or more. Due to motivation to get stuff done, I will guess(based only on my own judgement and nothing else) that we will need to wait at least 3 months to see any actual news on progress or it popping back up.
Where does this leave us? Well, to be frank, this could be a play in future, but for right now, it’s not worth it. Keep your money, play other stuff and build some profits, and come back to this one later. I personally won’t be taking a position until the end of November at the earliest, and more likely end of December/early Jan. Your money can be used elsewhere to make you more money, right now, I don’t see a benefit in tying up funds on a waiting game that might never happen, and if it does, It will be a long way out.
Once again though, it’s your money, do what you want, but instead of making you guys money, right now I’m just trying to save you some. I will update if the situation changes or as we get closer to the end of November, in the meantime, take profits.
Edit 13OCT21: spelling/grammar