Immuno-oncology: A Great Promise for Patients & Investors
By Skye Drynan
Capital Group Equity Analyst
For decades, medical researchers have struggled to find better ways to fight cancer. Despite progress in some areas, cancer treatments on the whole have continued to revolve around surgery, chemotherapy and radiation. But those therapies have many shortcomings, starting with the fact that they all too often are unsuccessful. Even if they repel a cancer in the near-term, the benefits can be short lived with malignancies returning, often in a more virulent form. Beyond that, traditional treatments are frequently painful and debilitating, severely impairing a patient’s quality of life.
Now, biopharmaceutical companies are making dramatic advances in an emerging area of research known as immuno-oncology. This marks a significant milestone in the battle against cancer. As the name implies, immuno-oncology marshals the human body’s own immune system to fight cancer. In many cases, immunotherapy is vastly preferable to conventional treatments. Survival rates are higher in several tumor types, and these medications have the potential to significantly extend lives. Treatments also can be deployed against a wide array of cancers. I believe immuno-oncology holds enormous promise for patients and significant opportunities for investors.
Many biopharmaceutical companies are working on immune-based treatments in the multi-billion-dollar cancer market. Two immuno-oncology drugs have been approved by the U.S. Food and Drug Administration, and clinical trials of several other medications have shown very positive results. I am focusing on two drug groups that have the greatest potential to make an immediate impact: checkpoint inhibitors and CAR T-cells. In my research, I have spoken extensively with doctors, academic researchers and other medical experts to identify companies that are at the forefront of the field. I believe these companies have the potential to benefit client portfolios in coming years as immune-based approaches are steadily embraced by oncologists. In addition to immunotherapy, I am also tracking other promising oncology treatments, including new medicines in cellular metabolism. Some of these medications have potential applicability for other diseases. Overall, I believe that there are multi-billion-dollar sales opportunities for companies that can deliver transformative drugs.
Conventional cancer therapy has many limitations.
The attraction of immunotherapy stems partly from the limitations of conventional treatments, which can prolong patients’ lives in the short term but have uneven longer-term success rates. In some ways, cancer research has not kept pace with innovations in other areas of society. Many current therapies are neither efficient nor effective. Of the nearly $50 billion spent on cancer treatment each year, it’s estimated that about three-quarters of that provides no benefit. A common problem is that cancer cells, which are highly adaptable and mutate quickly, develop resistance to conventional treatments. That leaves doctors with diminishing alternatives and patients with dwindling hope. Also, current approaches are often too broad in scope and indiscriminate in what they target. Chemotherapy, for example, poisons healthy cells as well as malignant ones.
Researchers have worked for decades to determine why the immune system can’t rebuff cancer the way it does other illnesses. They have long known that the immune system tries to mount a fight, but scientists were stumped as to how malignant cells could circumvent the immune response. That has changed in recent years as researchers have made notable strides in understanding how the process works.
When malignant cells form into a cancerous tumor, the immune system dispatches T-cells. They attack the tumor and send chemical signals to other parts of the immune system to join the effort. Researchers have discovered that the chemical signals tell the malignant cells to produce something that neutralizes T-cells. In other words, they tell tumor cells to sheathe themselves in a protective covering that allows them to hide from T-cells.
To overcome that, biopharmaceutical companies have developed checkpoint inhibitors that prevent tumors from counteracting T-cells. The current wave of medications focuses on inhibiting proteins known as PD-1 and PD-L1. With tumors shorn of their defense, T-cells can attack far more effectively. The FDA has already approved two drugs based on this mechanism of action.
Another promising area of research involves a related therapy known as CAR T-cells. This is a process in which T-cells are extracted from the patient and re-engineered to increase their potency. The cells, which are effectively retrained to recognize and destroy cancer, are then introduced back into the patient. I think of them as the Navy SEALs of immuno-oncology; they are highly trained in their targeting of a specific malignancy. The development of CAR T-cells is not as far along as that of checkpoint inhibitors. CAR T-cell research still must overcome the risk that the re-engineered cells become so powerful that they overwhelm the immune system. Still, CAR T-cells have great promise.
Much work is yet to be done, but early results are promising.
As with any emerging medical treatment, there are still many unknowns with immuno-oncology. Nothing is a panacea, and no single medication will be effective in every case. It’s likely that treatments will involve multiple drugs working in tandem. It will take time for researchers to determine the optimal drug combinations for specific cancers. Questions about side effects and the pricing of the medications must be resolved. It’s also important to point out that supposed breakthroughs have sparked enthusiasm in the past only to later fall short of expectations.
Nevertheless, immunotherapy has the potential to radically change the way we think of cancer treatment. I believe that we are in a golden age of research and development in the biopharmaceutical industry. Cutting-edge discoveries are being made in a number of areas, and immuno-oncology is one of the most promising. It has the potential to extend patient lives by many years – in effect, coming as close as science has ever been to finding a “cure” for cancer. In the next few years, I expect a number of companies to introduce immune-based medications. After that, attention will turn to determining which drug combinations are the most effective against specific cancers. That will be an essential step in boosting long-term survival rates.
Skye Drynan is an equity analyst covering the biopharmaceutical industry. Based in Los Angeles, she has 16 years of investment experience and has been with Capital Group for seven years.