Cell Therapy Deal Review: July

Author: Mark Curtis, 08/18/15

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Welcome to your Cell Therapy Deal Review for the month of July. Here at Signals we’ve decided to change the name of this monthly column, to pay consideration to the fact the majority of the technologies discussed here are cell-based. Moving forward, I will continue to focus on the cell therapy industry specifically, but also comment on technologies from the stem cell, gene therapy, and regenerative medicine segments as notable news arises. To that end, July was yet another exciting month that saw the largest biotech IPO in history (on a valuation-basis) spawn from the cell therapy industry.

One year ago, Conkwest was a quiet little company developing a natural killer (NK) cell line for cancer, carrying out its business in the shadows of rapidly developing cell-based immunotherapy companies around the world focused on CAR and TCR technologies. Today, it is NantKwest (NK), the company that takes the record for having the largest biotech IPO in history on a valuation-basis; yes, even beating out Juno Therapeutics’ frothy US$1.9 billion IPO valuation back in December 2014. The company was formed by L.A. billionaire and bio-entrepreneur Patrick Soon-Shiong, a man with a long history of successful business ventures.

NantKwest is the latest company to go public in the cell-based immunotherapy realm. Its lead candidate, an activated natural killer (aNK) cell line, was derived from a cancer patient and is unique because it lacks a number of inhibitory receptors that prevent the unbridled release of granzymes, a type of enzyme that NK cells release upon docking with aberrant cell types that lead to cell death once in the cytoplasm. Neukoplast is in multiple Phase 1 studies for acute myeloid leukemia, Merkel cell carcinoma (MCC), and other blood cancers.

NantKwest’s second candidate, a novel form of cell-based immunotherapy known as a CAR-TNK, is engineered to express a high-affinity form of CD16. When antibodies are deployed to eradicate cancer in a targeted manner, some of the cytotoxicity is mediated directly by the binding of the antibody to the cell. However, a second, key, mechanism is the binding of an effector cell to the antibody, which can then facilitate destruction of the cancer cell through the release of cytotoxic enzymes. Many patients’ NK cells do not express the high-affinity form of CD16, and thus have poorer prognoses. NantKwest will develop its CAR-TNK product as a combination therapy with antibodies.

Also on the NK front, Fate Therapeutics (FATE) announced a deal with the Board of Regents, of the University of Minnesota, to enter into a research collaboration that will tie together FATE’s programming capabilities with assets at the University of Minnesota in pursuit of novel NK cell therapeutics. Dr. Jeffrey Miller, an NK cell biologist at the University of Minnesota, recently identified an “adaptive” form of NK cell that exhibits increased persistence in vivo. FATE will aim to further enhance the qualities of these cells with various reprogramming tools to promote the cell line’s ability to eradicate cancer. In consideration for the deal, FATE will retain an option to secure exclusive patent rights to any intellectual property generated through the collaboration. FATE and Juno Therapeutics have partnered to enhance Juno’s CAR products.

Kite Pharma (KITE) and The Leukemia and Lymphoma Society (LLS) will be working together to promote patient education on CAR products for the treatment of blood cancers. Under the terms of the partnership, the LLS will rollout an education campaign and provide support for KITE’s KTE-C19 candidate, a CAR product targeting the CD19 receptor. In addition, the LLS will pay KITE US$2.5 million through its Technology Accelerator Program (TAP) to help fund clinical development of KTE-C19. KITE is expected to pay the LLS commercial and regulatory milestone payments in return for its support. The lead indication for which KTE-C19 is being investigated is diffuse large-cell B cell lymphoma (DLBCL). Pivotal results for DLBCL are expected in 2016. The technology is also being investigated for two rare lymphomas, primary mediastinal B cell lymphoma and transformed follicular lymphoma.

If you recall back to my post on Doug Melton’s visit to Toronto and the use of beta cells for treating diabetes, you’ll remember that one of the key barriers to commercialization, currently, is immune destruction of beta cells following transplant. Canada’s Sernova (SVA) has made excellent progress on its Cell Pouch technology, a biocompatible device that provides a vascularized reservoir for beta cells within which they can grow, receive nutrients from the body, and release insulin to control blood glucose levels.

SVA just announced a collaboration with Dr. Mark Poznansky, of Massachusetts General Hospital, to incorporate a novel technology that protects beta cells from destruction by the host immune system. The research will be supported by JDRF, to the tune of US$150,000. The nature of the immune-protecting agent was not disclosed. Encapsulation of beta cells with biomaterials, specifically alginate, has been an area of interest for some time. However, thus far, these approaches have failed to preclude immune cells from the microenvironment of the beta cell.

With the advent of novel CAR and TCR products, T cells have been in the limelight the last few years. NK cells have not generated nearly the same amount of hype in the press. This is largely due to the fact that NK cells, in their “wild-type” form, have not exhibited the persistence and cytotoxicity required to compete with CAR and TCR technologies. However, this may change as technologies for gene editing and targeted cellular enhancement improve, as is already happening. What is certain is that Patrick Soon-Shiong recognized a market opportunity. The big CAR and TCR companies now have a perilous competitor on their hands.

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Mark Curtis

Mark Curtis

Mark is a Business Development Analyst at the Centre for Commercialization of Regenerative Medicine (CCRM), where he collaborates with the team to help evaluate the commercial potential of regenerative medicine and cell therapy technologies. He began his career at Princess Margaret Hospital studying cellular reprogramming of human skin cells. Following this project, he left the laboratory and took on a role with Bloom Burton & Co., a healthcare-focused investment dealer. While there he supported the advisory team in carrying out scientific diligence on early-stage biotechnology companies. Prior to joining CCRM he was a consultant to Stem Cell Therapeutics, a Toronto-based biotechnology company focused on developing therapeutics targeting cancer stem cells. Mark received a Master’s degree from the University of New South Wales in Sydney, where he studied the directed differentiation of embryonic stem cells, and a Bachelor’s degree in Biology, from Queen’s University. Follow Mark on Twitter @markallencurtis
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