Investing in biopharma firms making advances to cure cancer and autoimmune diseases

Recent advances in treatments that leverage the Y shape of antibodies hold promise in treating cancer and autoimmune diseases, says Fidelity's Eirene Kontopoulos.

• Antibodies are Y-shaped proteins produced by the immune system to fight foreign molecules, according to Fidelity Portfolio Manager Eirene Kontopoulos, who believes companies pursuing the ability to engineer them could be on a path to discovering new treatments for cancer and autoimmune diseases such as lupus and multiple sclerosis.
• "As our understanding of biology and chemistry has meaningfully improved, cutting-edge companies have developed the ability to engineer antibodies that bind to two different targets," says Kontopoulos, who manages Fidelity Advisor^® Biotechnology Fund, describing a type of medicine called a bispecific antibody.
• Kontopoulos, who holds a doctorate in neuroscience from Harvard Medical School, believes that successfully investing in biotechnology requires a competitive edge on the science behind the drugs, the likelihood of clinical success and the size of the total addressable market. In helming the industry-based, equity-focused strategy since 2018, she favors companies that can develop what she considers to be the most innovative therapies.
• The science behind bispecific antibodies is fairly simple to explain but promising, according to Kontopoulos. "One arm of the Y can bind to a tumor cell, while the other arm grips a T cell of the immune system, resulting in a bispecific antibody that offers a highly targeted way of bringing together a T cell to attack and destroy a tumor cell," she explains.
• Regeneron Pharmaceuticals, a top fund holding as of December 31, is the market leader for bispecific antibodies in oncology, using its Veloci-Bi^® platform to generate fully human bispecifics that most closely resemble naturally occurring human antibodies, according to Kontopoulos.
• She says Regeneron is on the cusp of receiving approval for what she considers an important novel medicine for multiple myeloma, linvoseltamab, which targets BCMA (a protein found on multiple myeloma cells) and CD3 (on T cells) to train the body to obliterate blood cancer cells.
• Other biotech companies are building on the Regeneron approach and broadening the use of bispecifics to autoimmune disorders. Kontopoulos is collaborating with Fidelity's research team to closely monitor these smaller companies and startups, including Zenas BioPharma and Candid Therapeutics — modest but meaningful fund positions at the end of December.
• "These companies utilize different versions of bispecifics in early-stage trials aimed at treating lupus, multiple sclerosis and other autoimmune conditions," she says. "I plan to keep a close eye on all these biotechs to monitor their progress on bispecifics, among other initiatives."