William Blair initiated coverage of Arcellx (NASDAQ:ACLX) with an “outperform” rating and fair value estimate of $40. The stock closed at $16.94 on Feb. 28.
Arcellx’s next-generation cell therapy platform is founded on the company’s proprietary d-domain technology, which “we believe has significant advantages over traditional scFv-based CARs,” writes analyst Raju Prasad, Ph.D.
In addition, Arcellx’s modular ARC-SparX platform could enable controllable and adaptable CAR-T therapies that are able to overcome some of the challenges for existing CAR-T therapies, such as CAR-induced toxicities and tumor heterogeneity, he added.
“To date, Arcellx’s lead candidate, CART-ddBCMA, has demonstrated a 100% overall response rate, including a 68% complete response rate, in highly refractory multiple myeloma (MM) patients, which we view as comparable to the leading BCMA CAR-Ts in MM,” Dr. Prasad said.
Arcellx plans to initiate a pivotal trial of CART-ddBCMA by the end of 2022, setting it up for potential commercial approval in 2025. “If the pivotal trial recruits a patient population with disease severity similar to those enrolled in Legend/Johnson & Johnson’s CARTITUDE-1 for cilta-cel, we believe CART-ddBCMA could become a best-in-class BCMA CAR-T therapy,” Dr. Prasad said.
Arcellx is using its ARC-SparX platform to develop “personalized” therapies for cancer patients based on their specific molecular profile. The company will begin evaluating the ARC-SparX platform in the clinic in multiple indications in 2022.
In addition, Dr. Prasad said Arcellx plans to leverage artificial intelligence to inform the discovery and optimization of SparX proteins for novel antigen targets, which could enable the company to expand the application of the platform outside oncology, including treating autoimmune diseases or using SparX proteins as a diagnostic tool.
