Adaptimmune Therapeutics
Today's memo is an international collaboration done with my friend Ambrose, a particularly bright young gentlemen out in Singapore. You should definitely follow him: @zebo. You can check out his take on Adaptimmune Therapeutics here.

Biopharmaceutical Companies are Scary, But Don't Let That Stop You From Learning About Them
You can always choose to pass on an investment, but give yourself a chance at understanding the basics. You might surprise yourself. Investing is all about learning. "Stick to what you know" is a death sentence if you don't continuously expand what you know.

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What Does Adaptimmune Therapeutics Do?
Adaptimmune, is a leader in T-cell therapy, and has clinical trials ongoing for three wholly owned T-cells. (Important: the trials are going very well)

What the Heck is a T-Cell?
T-Cells are a type of white blood cell that is an essential part of the immune system. T-Cells determine the specificity of immune response to foreign substances in the body. Rather than generically attack any antigens, T cells circulate until they encounter their specific antigen.

Why Is This Important?
Cancer is menacing mainly because of how good it is at evading the immune system. $ADAP has engineered special T-Cells such that they can recognize and bind to cancer cells and as a result, can stimulate the immune system to target and destroy cancer cells.

How Good Is Adaptimmune's T-Cell Therapy?
Clinical trials are judged on a set of factors- one of which is called Disease Control Rate which is the percentage of patients whose disease shrinks or remains stable over a certain time period. Adaptimmune's ADP-A2M4 T-Cell had a disease control rate of 94% in a recent Phase 1 trial.

Investment Thesis
Phase 1 trials went so well that Adaptimmune is now looking to target more diseases. Investing in $ADAP is a bet on continued success in Phase 2 trials, and and expanded list of potential diseases that could be treated with Adaptimmune's T-Cell therapies. Definitely check out Ambrose's memo, which goes further into the efficacy of the trials, the response from institutional investors, and $ADAP 's revenue growth.

Risks
Investing in early-stage biotech companies is risky because if a trial ends in failure, it can end the company's life. They are also prone to huge swings, as everyone tries to pile in the moment a trial is going well, and everyone runs for the exits the moment there's a rumor that a trial is not going well.

Adaptimmune is a good company to pick to exploit this dynamic, in my opinion, because of the longer-term potential of engineered T-Cells. More-so than normal, I feel like a single failed trial would not negate the promise of this approach. I expect there to be a lot of bumps along the way, and while it is less typical to see a buy-and-hold approach with biotech stocks- that's the approach I'm taking. I will be buying in at tomorrow's open.
Grace Gruber's avatar
Great memo on a company I've never heard of. I definitely see long term success in a firm like this since we will see more attention (& funding) go toward medical trials.
Billy's avatar
This is great. Do we possibly know who they are going up against, if anyone at all? I figure they may just be pitted against traditional cancer companies?
Nathan Worden's avatar
Sorry I missed this @woxley !

Competitors doing similar things with T-Cells would be:

Medigene (market cap $86.83M)
Immatics (market cap $717.56M)
Immunocore (private company)

So these are pretty small, but a big competitor could also be BionNTech which is a 19.63 billion company out of Germany.
Ryan C.'s avatar
Nathan thanks again for this write-up - also asking @zebo as well about this. Two quick questions - (1) are there any other successful biotech companies that this companies current trajectory resembles so we could compare and contrast what the long-term timeline might look like? and (2) Could you go into a bit more detail on this statement: "Adaptimmune is a good company to pick to exploit this dynamic, in my opinion, because of the longer-term potential of engineered T-Cells." - does this mean that they have some IP that could be super valuable even if the clinical trials fail? thanks again!
Ambrose's avatar
Like any typical biotech company, once the trials pass phase III and then FDA approval. We can look forward to a massive increase in the company's evaluation.

Adaptimmune stands out the most as the phase I results are mindblowing good. Thus, it has a high chance it will get FDA approval.

The therapy future was so promising that the company started hiring more people and institutions started pouring in (99.8% holdings). Yes, so even if somehow the FDA approval fails, I believe the company has some valuable tech.

It's definitely a long-term investment but if FDA approval passes. Investors will start pouring in speculating the potential for their next products in addition to the FDA catalyst. That 0.2% float will rocket the stock.
Kai's avatar
@zebo What is the timeline for the ongoing and upcoming trials?
Ryan C.'s avatar
Awesome - appreciate it. Thanks for the reply. This is what I was thinking; just wanted to make sure I wasn't missing anything. Bought some shares!
Ryan C.'s avatar
Last question - any approximate timeline around the FDA approval horizon? I could not find a ton online, but was looking like some potential additional study results by q2 2021? Thanks again!
Nathan Worden's avatar
Hey Ryan, glad it was helpful! @rconn2986

To your question #1) giving a comparison company is hard because there will be as many differences as there are similarities, but in the spirit of trying to be helpful (and also with the hope learning something from critique) I'll offer up Seattle Genomics $SGEN as a potential comparison company.

SGEN has been around a lot longer and has been in clinical trials for a treatment for relapsed Hodgkin lymphoma as far back as 2009. They have a proprietary antibody-drug conjugate technology (Monomethyl auristatin E or MMAE-based) which seeks to reduce many of the toxic effects of traditional chemotherapy while potentially enhancing anti-tumor activity.

So- they're not comparable in regards to the specific technology used, but, by looking at the timelines of their trials there may be some intuition gained about where Adaptimmune Theraputics is at (ADAP is early in their life cycle). Seattle Genomics' Wikipdea page (https://en.wikipedia.org/wiki/Seagen) has a 'Company History' section that gives a broad idea of just how long these trials take.

For your question #2): 'Explain more what you mean by:' "ADAP is a good pick because of the longer-term potential of engineered T-Cells'"-- I would echo Ambrose @zebo and just say that they're a good pick because Phase I results were good. I'm trying to convey both optimism for a starting position, but also not over exuberance because trials are long and plenty of things can go wrong.

Question #3) "Any approximate timeline around the FDA approval horizon?" - From what I've seen there was some hope of brining Adaptimmune's ADP-A2M4 to the market in 2022 for patients with synovial sarcoma. Source is from late 2019:

Ryan C.'s avatar
Amazing, thanks a ton! Just started a small position!
Ambrose's avatar
Yea, same. Just buy and keep an eye out. If it rises, just buy more ltr, winners keep winning.
What will be crucial is which of all the technologies will offer the best combination of low toxicity, efficient response, easy to manufacture and price. I’m a bit skeptic on T-cell therapy given the earlier hype on CAR-T therapies and the encouraging results of ADC’s and bi-specifics. NK-cell therapy is also very hot recently. Just as for CAR-T it will be important to see of it they can be successfully produced off-the-shelf (allogenic) and at what price... Competition is tough in this area. And DCR is impressive but also includes stable disease. Partial and Complete responses combined with Durability of Response is key. ORR (CP+PR) was 50% I read, which is quite good but sample still small. I don’t know their cash runway but that is also a key variable in biotech. A strong partnership could help. Many large biotechs are investing in the same area (e.g, Roche with Adaptive partnership). Technology seems to pass PoC but the field is evolving at amazing speed.
Nathan Worden's avatar
Thanks for your insight and expertise- totally agree that the sweet spot will be an optimal combination of low toxicity, efficient response, easy to manufacture, and price.

@jroom do you also follow genome sequencing companies? If so, let me know- there are a couple that @zebo and I are debating.

Open invite to you (and anyone else into this space) to join this group chat on the 'Genomics Revolution':
Thanks, I'm hardly an expert though. Just find biotech fascinating.

I'm less knowledgeable about gene sequencing but do try to follow some companies. I find it much harder to compare/analyse because unlike biotech you don't have trial results you can analyze/compare to determine who has an edge. Read your posts on Illumina and Twist. Good stuff! I still think Illumina has a great business but one of their challenges is that they are already scrutinized on M&A which limits the option of buying interesting new technologies.

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