Gamida Cell Ltd (GMDAQ)

[midastouch017]

2 Top Biotech Stocks to Buy in February

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Gamida Cell

Clinical-stage biotech Gamida Cell has recently become the talk of the town, and for good reason. On Feb. 10, the Novartis (NYSE:NVS)-backed company's shares jumped over 25% in a single day, after it came out with promising phase 3 efficacy and safety data for lead cell therapy candidate, omidubicel. The investigational drug proved superior in helping patients with high-risk blood cancers undergoing a bone marrow transplant to recover faster, develop fewer infections, and shortened hospital stays as compared to the standard umbilical cord blood transplant patient.

Omidubicel might now become the first FDA-approved cell therapy for bone marrow transplantation, which is an area with huge unmet demand. The company plans to file a biologics license application (BLA) seeking FDA approval for omidubicel in bone marrow transplant indication in the second half of 2021. The company is also studying this drug candidate in an early stage trial for a blood disorder called severe aplastic anemia.

Omidubicel, also known as NiCord, has been developed using the company's proprietary nicotinamide (NAM) cell-expansion platform technology, which is used to increase both the number and efficacy of any type of donor cells. In addition to being a superior treatment option over the currently available umbilical cord blood transplant, omidubicel can also offer an off-the-shelf treatment option to around 5,200 blood cancer patients who are eligible for a bone marrow transplant, yet unable to undergo it due to low availability of matching donors. Within three years from its launch, the company expects omidubicel to treat around 2,000 U.S. patients annually and capture 20% share of the bone marrow transplantation market, which is estimated to be worth $13.9 billion by 2026.

Gamida Cell is also working on GDA-201, another cell therapy developed with the NAM platform, which is an off-the-shelf infusion of natural killer cells (a type of immune cell than can kill cancer cells), to treat blood cancers such as non-Hodgkin lymphoma and multiple myeloma. The company aims to leverage its platform to develop several other types of cell therapies.

Gamida Cell offers a favorable risk-reward proposition to healthcare investors, since omidubicel is a significantly de-risked pipeline asset and can revolutionize the bone marrow transplantation space. The company has cash reserves of $127 million, which it expects to last until the end of 2022 without any additional infusion of funds. This is a reasonable expectation, considering the company's annual cash burn rate (calculated using operating expenses as proxy) is only $55 million. With upcoming catalysts such as submissions of BLA for omidubicel, an investigational new drug (IND) application for GDA-201 scheduled for 2021, and the possibility of Novartis increasing stake from the current 15% in the company, Gamida Cell's stock seems well-positioned to continue its upward growth trajectory for the next few months, if not the next several years.