In patients with r/r AML that received Flu/Cy lymphodepletion and the highest doses of NKX101 (3 weekly doses at 1 billion or 1.5 billion cells per dose), 4 of 18 achieved CR/CRi (22% CR/CRi rate) and 3 of 18 achieved a complete response with hematologic recovery CR (17% CR rate). 

There were no CRs at the lower doses of NKX101.

Needham says the results are a setback for NKX101, essentially resetting its development timeline before accumulating sufficient patient numbers.

It has lowered the price target from $26 to $19 due to a lower POS of 10% from 35%, with a Buy rating.

Nkarta plans to enroll 12-20 additional patients in the Phase 1 trial expansion cohort and provide an update in 1H of 2024.

The analyst notes that the ongoing development will focus on this conditioning regimen while allowing for consolidation with transplant and/or additional treatment cycles on disease progression. 

Also, an accelerated path to regulatory approval could be based on a relatively small expansion study using the new protocol, the analyst says.

Needham analyst also writes that NKX101 activity in a larger Flu/Cy cohort fell short as only one of 13 new patients reported achieving MRD negative CR. An earlier hypothesis on lower disease burden (blasts <5%) as an activity biomarker did not pan out.

The analyst also notes that the safety profile remains at par with other cellular therapies.

Price Action: NKTX shares are down 35.50% at $2.92 on the last check Tuesday.