AstraZeneca jumps deeper into cell therapy 2.0 space with $320M biotech M&A

Right from the start, the execs at Neogene had some lofty goals in mind when they decided to try their hand at a cell therapy that could tackle solid tumors.

Its founders have helped hone a new approach that would pack in multiple neoantigen targets to create a personalized TCR treatment that would not just make the leap from blood to solid tumors, but do it with durability. And they managed to make their way rapidly to the clinic, unveiling their first Phase I program for advanced tumors just last May.

Along the way, they attracted some high-level attention from Susan Galbraith, the cancer R&D chief at AstraZeneca. And that interest has now translated into a $320 million buyout of the private biotech, which had been godfathered into existence by Arie Belldegrun and David Chang, who pioneered autologous cell therapies at Kite and switched to the allogeneic approach, while working through Two River and Vida Ventures to kickstart a new generation of upstarts.

AstraZeneca is paying $200 million in cash upfront, with another $120 million reserved for milestones.

Carsten Linnemann

Neogene got its start at T-Cell Factory in Amsterdam, where Ton Schumacher, a top scientist at the Netherlands Cancer Institute, had joined forces with Carsten Linnemann. Bought out by Kite for their European operations, Schumacher and Linnemann teamed up to launch the upstart with a $110 million round — after Vida provided the seed financing to get things going.

Ex-Roche CEO Franz Humer, a close ally of Belldegrun’s and Chang’s, is executive chair of Neogene, where teams in Amsterdam and Santa Monica, CA, will now form a new subsidiary of the pharma giant.

The big idea here was to go far beyond the rather crude use of cells gathered by the first cell therapies.

Arie Belldegrun

“What Ton and Carsten did was eliminate the need to surgically resect tumors,” Belldegrun told Endpoints News at the time. “They used a simple biopsy (which is already routinely done) and out of that biopsy used synthetic biology technology identifying neoantigens. And then, by AI, engineering neoantigen-specific T cells, proliferate these cells. And a few cells can generate a dramatic anti-tumor response.”

Going the TCR route, as Adaptimmune, Immunocore and others could tell you, also opens a path to intracellular targets, rather than restricting focus to the cell’s surface.

The economics of personalized therapies — something that would not have escaped the attention of AstraZeneca — was admittedly challenging. But the founders figured that if they could find a way to generate a dramatic response in solid tumors, they could work a strategy that would make it accessible in some fashion.

“They built a fantastic company in the original Kite buildings” in Santa Monica, Belldegrun tells me, where NeoGene concentrates work on clinical development and manufacturing, with the research in Amsterdam. In the beginning, he adds, they worked on highly personalized TCR therapies with the goal of becoming a “one-stop shop T cell engineering company.” But a trip to the NIH and Steve Rosenberg’s lab led to a pact to in-license his work on shared antigens against KRAS and p53, which attracted Susan Galbraith’s attention.

In a matter of weeks they hammered out a buyout.

It’s unusual for any Big Pharma to make an early-stage play like this, in an era when de-risked assets are running at a premium. AstraZeneca CEO Pascal Soriot — who made his biggest M&A bet on Alexion’s portfolio — owes the turnaround at the pharma giant to the ongoing success of expanding the Tagrisso and Lynparza franchises while adding a highly successful Enhertu to the oncology mix at an advanced stage of development.

But they’ve also begun promising to double the oncology franchise at AstraZeneca, and Galbraith has an ambitious strategy of her own to help achieve that big goal. And that includes finding a new path to curative therapies.

“Neogene’s leading TCR discovery capabilities and extensive manufacturing experience complement the cell therapy capability we have built over the last three years and allow us to accelerate the development of potentially curative cell therapies for the benefit of patients,” she says in a statement.

TPG, EcoR1 Capital, Jeito Capital, Syncona, Polaris Partners and Pontifax all joined Two River and Vida in financing the startup.

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