A Lifesaving Cancer Therapy, But There Isn’t Enough

A multiple myeloma diagnosis can be devastating. Encouragingly, though, the market is getting increasingly crowded with powerful new therapies that can extend patients’ lives.

Cell therapy is one area of great hope, with clinical data from Johnson & Johnson’s (JNJ) Carvykti driving excitement in the medical field. A late-stage study released earlier this year showed the treatment cut the risk of relapse by 74% compared with the standard of care—a level of efficacy seen as game-changing by experts, though with potentially serious side effects.

There is a major hitch: JNJ and Legend Biotech (LEGN) can’t keep up with demand, which means some patients die on wait lists. A similar therapy from competitor Bristol-Myers Squibb (BMY), also faces manufacturing hurdles.

Making these engineered human-cell products, known as CAR-Ts, is a complex and individualized process. The treatment involves removing T-cells from a patient’s blood, modifying them in a lab to fight cancer, and then infusing them back into the patient. It takes several weeks for the cells to be shipped back and forth between the medical centers and the labs—an agonizing process for very sick patients.

While JNJ and Legend say they are doing everything possible to increase manufacturing, the process is unique to each person, which means economies of scale don’t apply.

JNJ and KEGN received U.S. Food and Drug Administration (FDA) approval last year to treat later-stage, sicker patients and are now seeking approval to expand the use of the treatment for earlier-stage patients. The bigger question is whether they can quickly and smoothly increase capacity from about 1,000 shots annually to their goal of 10,000 shots by 2026.

While that is arguably already close to being priced into Legend’s stock, encouraging signs that they can meet that goal and eventually expand beyond that would drive the shares higher. For JNJ, while incremental moves on Carvykti might not be equally material, its expansion will go a long way in cementing the company’s position as a leader in multiple myeloma while helping to replace revenue from blockbuster drugs going off-patent.

Carvykti’s commercial success ultimately will depend on how well the product does with physicians and patients in earlier stages of the disease in an increasingly crowded market.