On December 18, the Cancer Immunotherapy ETF (Nasdaq: CNCR) conducted its semi-annual rebalance and reconstitution process. At that time, seven new immunotherapy companies were added to the fund. One of these new additions was Allogene (Nasdaq: ALLO), a company focused on developing next-generation cell therapy products that utilize cells from healthy donors rather than the patients themselves. The term for this type of therapy is allogeneic, and the idea is that allogeneic cells may have the potential to be used more widely than today’s autologous cell therapy products one day. View holdings of the Cancer Immunotherapy ETF.
We recently caught up with the CEO of Allogene, David Chang, M.D., Ph.D. to ask him about this concept. Those of you who follow the cell therapy space closely will likely recognize his name because Dr. Chang is a pioneer in the field and was most recently Chief Medical Officer of Kite Pharma, which was acquired by Gilead Sciences in the fall of 2017 for $11.9 billion. Kite’s chimeric antigen receptor T-cell (CAR-T) therapy Yescarta was approved by the Food and Drug Administration (FDA) in October of 2017 to treat an aggressive form of lymphoma, making it only the second CAR-T product approved in the world.
In our interview below, Dr. Chang describes what inspired him to co-found Allogene and where he sees the field of cellular immunotherapies headed. He also explains why he thinks allogeneic cell therapies might not only be equal to today’s therapies in the future, but also come with advantages that perhaps might make them even better cancer killers. As an added bonus, Allogene Co-Founder and Executive Chairman Arie Belldegrun, M.D., FACS also joined the conversation and added some thoughts about a question that relates to what kind of leadership is needed to run a cell therapy company. Below is a transcript of the interview, which has been minimally edited for clarity.
CNCR ETF: Thank you for joining us today. Can you please briefly introduce yourself?
David Chang: My name is David Chang. I am the Co-Founder and Chief Executive Officer of Allogene. This is a newly formed biotechnology company that is set out to revolutionize cell therapy in oncology from where we are now to what I believe is the next phase. Which is being able to use products that are made not just for one person, but therapies that can be made for many people who need the treatment.
CNCR ETF: Recently you were the Chief Medical Officer of a cell therapy pioneer, Kite Pharma. Gilead Sciences acquired that company. You deserved a well-earned break, and a lot of people in your position maybe would have taken a long vacation or something, but you got right back into the field. What inspired you to start Allogene and to get back to work so quickly?
David Chang: I was lucky to be part of what was really groundbreaking work at Kite to get one of the first autologous cell products to be approved. While we were doing that, we were constantly looking to take the field to the next level. My view is that you can always rest, but when there is an opportunity to help people in front of you, you have to go after it. There is no time to wait. There are so many patients who need a good therapy that can help save their lives and I believe that cell therapy can be used more widely.
CNCR ETF: Let’s talk about the therapies that are on the market today. They have been approved for types of leukemia and lymphoma. Can you describe how they work and also what are their limitations? You talked about how you want to take this to the next level. What needs to be taken to the next level?
David Chang: The most remarkable thing about cell therapy is that you are essentially using a live form of a medical product – your own T-cells that are engineered so they can specifically recognize certain types of tumors. What we have learned is that when you use live cells, they have the ability to amplify in numbers. For example, if you give ten cells, after they go into the body they can multiply to a million cells and they become a very effective killer of cancer. That is the concept of cell therapy. Where we are right now is that we engineer the individual patient’s own T-cells (called autologous therapy) to fight cancer. T-cells are lymphocytes that fight infection in the body. We use those cells as a starting material and we engineer them and give them back to the patient. It is a very elegant concept, but when you think about this from a pharmaceutical model, you cannot manufacture the product until the patient is ready because you have to use his or her own cells. The patient has to undergo a collection process, which can take some time, and then the manufacturing process can take anywhere from three or more weeks. That might not sound like a long time, but for patients who have a disease that is progressing and, in some cases, have been told they might have six months to live, each week means everything. When you look at the current autologous clinical study data, about 10% to 30% of patients who are enrolled in the studies cannot receive the therapy because their disease progresses while they are waiting. Lastly, when you think about the manufacturing process that I just described, no matter how you cut it, each manufacturing run can serve only one patient. That is the whole concept of autologous cell therapy. That is where we are now. Where we want to take the field is instead of using the patient’s own cells, we want to use cells from a healthy donor and engineer them in such a way that they can be used not in just one patient, but potentially 100 or more patients. We want efficiency in terms of manufacturing, so instead of a manufacturing process that only serves one patient right now, we estimate we may be able to treat up to 100 patients from a single manufacturing run which is significant. More importantly from the patient and doctor’s perspective, these are ready-made products available on demand. Once the treatment decision is made, you wouldn’t have to wait. You would simply undergo the necessary preparation to receive the cells so there is considerable convenience during a very critical time. We believe this is what is needed to expand the use of cell therapy beyond the current indications, to earlier lines, and other tumor types. I also cannot ignore is the fact that with the efficiency in the manufacturing process, we would hope to eventually make cell therapy available to a larger patient population at a more affordable price.
CNCR ETF: The benefits that you have described are very clear. What are the hurdles to making it happen, and is there data that exists today that gave you the confidence it is possible? How do you foresee the development process of this type of technology progressing?
David Chang: When you think about the underlying concept of using cells from a donor to fight your cancer, there is a fundamental immunological process that must be overcome. The technical term for it is called graft-versus-host disease, where a donor’s cells react to your own cells. Not just cancer cells, but also your own normal cells. That is a real consideration. Host-versus-graft is when a patient’s immune cells react against these allogeneic cells and destroy them before they can carry out an anti- tumor effect. That would potentially impact the efficacy. These are the two technical challenges, which four or five years ago were not addressable before the advent of gene editing. What gene editing allows us to do is specifically alter the cells. In our case, we edit out a gene called ‘T-cell receptor’ so that the cells cannot carry out a graft-versus-host effect. So that potentially addresses that safety issue. We then edit out a gene called CD52 so we can selectively alter the immune profile of the patient that allows these cancer cells to expand. This addresses host-versus-graft. Now what is the evidence that makes us feel comfortable? Our development partner, Servier, presented data at the 2018 American Society of Hematology (ASH) annual meeting based on a Phase 1 study of UCART19 in 21 patients to date in both pediatric and adult acute lymphoblastic leukemia (ALL). The study showed that when we use the allogeneic product the way I have described, there are minimal issues with graft-versus-host disease and these cells can expand into the patient. Most interestingly, we have found ways to expand the cells very effectively into patients, which is very critical. That is really the essence of data that we presented at ASH.
CNCR ETF: Do you feel that the efficacy of allogeneic therapies needs to be comparable or better than autologous therapies? Is that going to be possible?
David Chang: Safety and efficacy are the two most important aspects of any treatment. We currently believe that our approach should produce the same level of efficacy and safety as the current autologous products. However, there are some possibilities that might allow us to be even better than the autologous cell products. One I have already talked about is the fact that virtually everyone enrolled in an allogeneic study can receive cells because you don’t have to be concerned about disease progression during the wait time for the manufacturing process. I think this already leads to more patients benefitting from the treatment. The second is that when you do an autologous therapy, you have to use the patient’s own lymphocytes and these lymphocytes, unfortunately because of chemotherapy and other prior treatments, do not behave as well as lymphocytes that are derived from a healthy donor. There is a potential that our product could provide a better outcome on both efficacy and safety because we start with a healthy donor.
CNCR ETF: Let’s talk about your pipeline and the types of cancers you are going after and the antigens that you are engineering into these products. We know that the current CAR-T products on the market today target a protein called CD19. Another antigen that seems to be very popular in development right now is called BCMA for multiple myeloma. I know that both of those are in your pipeline. Are there any others you are focused on right now?
David Chang: Both CD19 and BCMA are great targets. For example, CD19 has the potential to address the need in B-cell malignancies that address various forms of leukemia and lymphoma. There is great potential and opportunity there. We expect to begin our trials with ALLO-501 in non-Hodgkin lymphoma (NHL) in 2019. The second target you mentioned, BCMA, is unique to multiple myeloma and so far some of the early data indicate that CAR-T approaches targeting BCMA can produce very deep and durable responses. We have many other programs in the pipeline. Probably the next one we will go after is against a target called FLT3 for the treatment of acute myeloid leukemia (AML). We presented at this year’s ASH meeting our preclinical work with our FLT3 product ALLO-819 targeting AML. Those three targets cover I believe all of the major indications in hematological malignancies. Then we are progressively moving into solid tumors with targets like CD70 for renal cell carcinoma and DLL3 for small cell lung cancer as well as other tumor types. I would say this is a very exciting time in the oncology space and I hope that cell based therapy, especially with the allogeneic approach we are working on, will revolutionize the treatment of cancer.
CNCR ETF: So speaking of those solid tumors, this is a big topic of discussion within the industry right now. Everyone is wondering if eventually cell therapies will work in solid tumors. How optimistic are you that the science will get there one day?
David Chang: Solid tumors, based on what we know about how T-cells work, should be addressable. Many companies, including us, are going after them. In fact, this is a topic that is also attracting the attention of the National Institutes of Health (NIH), National Cancer Institute (NCI), and Food and Drug Administration (FDA). They convened a special two-day meeting in December just to brainstorm about how we should be utilizing cell-based therapies for the treatment of solid tumors.
CNCR ETF: The science of this is moving very quickly. As recently as a few years ago, many people viewed CAR-T almost as science fiction. Now the first round of these treatments are on the market today. As a company, how do you make sure you are keeping up with the pace that the science is changing?
David Chang: That is the best part of what we do – keeping tabs on all of the discoveries and research and things that are happening in the scientific community. A lot of us, including myself, were trained as a physician scientist, and this is really something very dear to our hearts. We love looking into the different technologies. We are always eyeing how we can utilize new technologies to improve the cell- based therapies. We are fortunate because people recognize what we have accomplished with the development and approval of Yescarta. As a result, they come to us with different opportunities. So with that combination, we believe we have a good handle on what is going on in the space and we are looking for the best ones out there.
Note: at this moment Allogene Executive Chairman Arie Belldegrun entered the room and added some thoughts to this question.
Arie Belldegrun: I would take this one step forward. To be the CEO of a cell therapy company is not like being the CEO of anything else in pharma or biotech. This is because of the fast pace of change. Everything that happens in this space involves basic science, clinical development and translational research. You need people like David who can focus. If you are sitting there and you are not a clinician and not a scientist but a great administrator or banker, that is perfectly ok but I think you may be missing something because trains are moving fast. If you have locked yourself in, it is a problem. For example, if your mentality is “I have convened an advisory committee six months ago and that is what they told me to do, and I have the minutes and this is my plan,” you will lose out. As things are moving, you need to be flexible. In our case, we did not think just of CD70 or FLT3, we had 17 assets. How do you decide which ones to move forward? You need to be there and be flexible. It is important who is at top. You can get feedback from everyone, but you need to have your own conviction. You have been there, you have to have seen it, and say I am moving and changing priorities when things change. Cell therapy is a special product and the evidence is that it takes a special type of company and leadership to develop it.
CNCR ETF: Going back to the antigens. I know a lot of companies are starting to think about designing products that target multiple antigens. We have heard terms before like “AND gating” and “OR gating.” Does Allogene have plans to do that as well?
David Chang: Yes, that is one of many different things we are entertaining. We are looking at masking technologies and what you have just talked about, “AND gating” and “OR gating.” Those are all the underlying concept of synthetic biology, which is the business we are in, so we are exploring all possibilities.
CNCR ETF: As a last question, you mentioned how important manufacturing was for autologous therapies, but I’ll bet that making investments today to make sure you have the best manufacturing for these allogeneic therapies is very important as well. Can you talk about that, and what investments are you making at a company level today?
David Chang: If you think about it, we are in cell and gene therapy, and the cell part is really related to the science and manufacturing capability. So, yes, we are making a lot of investments. That starts with hiring the best people. We were fortunate to recruit someone named Alison Moore from Amgen to head up our technical operations. We will build our own manufacturing facility. I think this will differentiate us from others. We have also filled key positions with outstanding executives who can build the organization and bring in the needed expertise. That is one part of the equation. The second part is to continue to invest in the engineering technology to improve the product. These things are what will allow us to continuously advance this field.
CNCR ETF: Thank you for your time today. The Cancer Immunotherapy ETF is an Allogene shareholder and we look forward to following your success. Best of luck.
David Chang: Thank you very much.
Opinions expressed are those of the author, interviewees, or Funds and are subject to change, are not intended to be a forecast of future events, a guarantee of future results, nor investment advice. Fund holdings and allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security. Amgen and Servier are not a holding of the Fund or affiliated with the Fund.