Ziopharm Oncology Inc (NASDAQ:ZIOP) revealed on Tuesday plans to undertake a new acute myeloid leukemia (AML) clinical trial. This trial will specifically test the gene CD33. Let’s delve into the implications of this new testing.

Wells Fargo analyst Jim Birchenough explains, “CD33 is expressed on myeloid leukemia cells and leukemic stem cells as well as normal myeloid and monocyte precursors and at low levels on activated T cells and NK (natural killer) cells.” This CD33 CAR-T (chimeric antigen receptor) program contrasts from Ziopharm’s current program testing CD19 that is non-viral, considered the “Sleeping Beauty system.”

The analyst does feel optimistic about Ziopharm’s testing expansion of the chimeric antigen receptor, CD19. However, Birchenough “would highlight significant risk to a CD33 targeted CAR-T and a very competitive landscape for CD33 targeted antibodies, bispecifics and potentially better targeted adoptive cellular therapies (ACT).” That risk is manifested with anti-CD33 antibody drug conjugate (ADC) withdrawal, as the analyst finds the inability to demonstrate concrete survival results in AML and views Seattle Genetics as a real competitor with its second generation of CD33 ADC, SGN33 also nearing the end of testing.

Birchenough posits, “Ultimately we believe that CD123 may represent a better target for AML given published data suggesting lower toxicity to normal hematopoietic precursors for a CD123 vs CD33 CAR-T and would highlight ongoing clinical programs at the U. Pennsylvania, Baylor College of Medicine plans by Cellectis to initiate clinical testing of a CD123 CAR-T 2H16.”

Birchenough reiterated an Underperform rating on the stock with a valuation range of $5.00 to $8.00.

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. Birchenough is ranked #114 out of 4,055 analysts on TipRanks, with a 46% success rate and an average return of 18.6%.

According to TipRanks, 1 analyst rates Ziopharm Oncology a Buy, while 2 rate the stock a Hold, and 1 rates the stock a Sell. The average price target for the stock is $11.50 with nearly a 104% upside.