Nantkwest Inc (NASDAQ:NK) Looks Like A Great Long Term Biotech Play

Sometimes in biotechnology, you've got to take a step back from the day to day fluctuations of a company's share price and look at the science and technology that underpins its development program. Great science doesn’t always win out, and mismanagement has been known to inhibit a promising therapy's path to market, but there are far more examples of bad management getting great science on the shelves than there are excellent management doing the same with bad science.That's why we've got the FDA and such a stringent clinical development system in place, after all.We're always on the lookout for great science, and we've found some with Nantkwest Inc (NASDAQ:NK).This is California-based biotech that's enjoyed a pretty solid run over the past year, rising from $1 to as high as $15. With the recent pullback, we feel the company remains undervalued. NK Daily ChartSo, let's get to the science.Nantkwest is trying to develop a cancer therapy using what are called natural killer (NK) cells. These are one of the many different types of cells that comprise our immune system, and their job is to go around looking for cells that shouldn’t be there and destroying them. When they spot a cell that needs getting rid of, they attach to it, inject it with toxins and the cell explodes. Well, more slowly breaks apart, but to think of it as an explosion is neater.Cancer cells, however, are able to hide from NK cells. How? NK cells have two kinds of receptors – one that attaches to cells they want to remove and another that attaches to cells they don’t. This latter receptor type is in place to stop the NK cells attacking healthy cells and, when attached, it basically turns the NK cell off. Cancer cells are able to mimic the part of a healthy cell that attaches to NK cells to turn them off, which is one of the reasons cancer is able to proliferate unchecked.Nantkwest has discovered an NK cell that doesn’t have the second receptor type – meaning the cancer isn’t able to turn them off. It's then engineered this NK cell type to recognize antibodies that attach to cancer cells on the back of antibody therapy. This means that the NK cells only go after the cancer cells and don't start attacking healthy cells (because they don't have the turn-off mechanism that normal NK cells do).The real beauty of this is that the treatment is totally off the shelf. A patient is diagnosed, the physician selects the right version of Nantkwest's NK therapy (the one that targets the cancer cell type in question) and sets up the patient for infusion with the therapy.It really could be a game-changer. The company is trialing it right now in pancreatic cancer as part of this trial and has just announced its expansion of-of this study to incorporate a variety of other cancer types.It's an unblinded study, meaning that while it doesn’t wrap up until the end next year, there's plenty of room for interim analysis and – by proxy – catalysts to get this stock running.Cash on hand came in at $102 million, which should be enough to get the company through to at least the second quarter next year, removing any immediate dilution risk.There has been some suggestion as late that the guy behind this company, Patrick Shoon-Shiong, the world's richest doctor and the billionaire philanthropist that has the ear of President Trump, has been playing around with accounting practices a bit, and we think this is contributing to the current undervaluation. It's a risk, sure, but this guy has an incredible track record and, while it's not an ideal input to the value equation, we think the reward very much outweighs the risk on this one at current prices.We will be updating our subscribers as soon as we know more. For the latest updates on NK sign up below!Disclosure: We have no position in NK and have not been compensated for this article.