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Small-Cap Bio Draws Bullish Call Spread Ahead of ASCO

by | May 16, 2022

Adicet Bio (ACET) trading over 600X average calls on 5/16 with a buyer of 2500 June $15/$25 call spreads for $2.10 to open. ACET has no other notable open interest and just 2.65% of the float. The $425M company focuses on allogeneic gamma delta T cell therapies for cancer and other diseases. They use gamma delta T cells engineered with chimeric antigen receptors to enhance selective tumor targeting and facilitate a stronger immune response for more durable treatment in patients. ACET has a proprietary process by which they ‘bank’ these cells for use as an ‘off the shelf’ product for multiple patients. First, the company performs leukopheresis from a donor and then active the gamma delta cells and tranduce them with CARs. This supply is then used for patients. The process is designed to scale in a highly efficient manner as well. The advantages of gamma delta T cells are numerous including longer lifespan, broad anti-tumor toxicity, and more adaptive immune response. The lead product is ADI-001, which is in Phase I clinical study for the treatment of non-Hodgkin’s lymphoma. ADI-001 has shown strong targeting activity against tumors. The remainder of their pipeline is focused on expansion of ADI-001 into patients relapsing after autologous CD19 CAR T and other NHL subtypes as well as ADI-002 for solid tumors. ACET will give updated data in June at ASCO for ADI-001 for the potential treatment of relapsed or refractory B-cell Non-Hodgkin’s Lymphoma (NHL). SMBC Nikko started coverage in March at Outperform with a $28 PT. The firm thinks Adicet is one of the best capitalized to execute on its platform and the potentially improved safety and efficacy and application in solid tumors of these therapies could give them important differentiation from allogeneic CAR-T therapies. Truist starting at Buy in March with a $30 PT. The firm notes ACET is leading the field in harnessing the immense therapeutic potential of a rare immune cell, the V-delta-1 gamma-delta T cell and the specialized manufacturing and a proprietary cell engager they have developed can be a barrier to others entering the space and should protect Adicet’s pole position. Jefferies likes the name into the data update in June and thinks it can be a ‘significant stock moving event.’