Over the next year, a series of clinical milestones and regulatory decisions—what companies and investors like to call “inflection points”—will set for years to come the direction of what has been until now the fledgling biotech segment focused on genome editing.

Yet this week, investors received a reminder that in genome editing, inflection points don’t always lead to big stock gains: Beam Therapeutics (BEAM) shares skidded 12% in early trading, reaching a new 52-week low as it slid from $20.80 to $18.36, after the company announced a restructuring and reprioritization of its pipeline of base editing therapies that will include elimination of about 100 jobs—some 20% of its workforce.

Beam said it will prioritize development of its ex vivo and in vivo sickle cell disease programs—including BEAM-101, which applies the company’s Engineered Stem Cell Antibody Paired Evasion (ESCAPE) non-genotoxic conditioning strategy, and in vivo delivery to hematopoietic stem cells (HSCs).

Beam also said it will:

• Prioritize development of its in vivo base editor BEAM-302 for the treatment of alpha-1 antitrypsin deficiency (AATD).

• Conduct an initial clinical trial in the U.S. assessing BEAM-301 as a treatment for glycogen storage disease 1a (GSD1a).
• Seek partnerships for BEAM-201 and other potential ex vivo CAR-T programs, including ongoing research to create next-generation allogeneic cell therapies with multiplex base editing. For BEAM-201, Beam plans to generate a focused clinical dataset in T-cell acute lymphoblastic leukemia (T-ALL).
• Focus near-term spending on research and platform applications that apply Beam’s in vivo editing capabilities in the liver, targeting both rare genetic and common disorders, as well as select opportunities in hematology and immunology/oncology.
• Pause its hepatitis B virus program and seek for it a partner “given the requirement of specialized development and commercial capabilities.”

“From the beginning, Beam’s strategy has been to develop base editing technology broadly across a diverse portfolio of programs and delivery modalities, and our science and pipeline continue to progress across the board,” Beam CEO John Evans stated. “In this challenging market environment, however, we need to make the difficult decision to focus our resources on those clinical programs and research areas we believe have the highest potential for near-term value creation, while continuing to build a strong company for the future.”

Intellia Therapeutics (NTLA) shares fell about 3% on Wednesday from $29.05 to $27.96, and dipped another 3% on Thursday, to $27.10, despite the company sharing more positive news.

Intellia’s NTLA-2001 became the first first-ever investigational in vivo CRISPR-based gene editing therapy cleared to enter late-stage clinical development when the FDA cleared the company’s Investigational New Drug (IND) application for NTLA-2001 for the treatment of transthyretin (ATTR) amyloidosis with cardiomyopathy. The decision paves the way for a global Phase III study of NTLA-2001 that is expected to start by year-end 2023.

In a statement, Intellia president and CEO John Leonard, MD, said the company will share details about that pivotal trial on its third-quarter earnings call with analysts, set for November 9.

“Details on trial design at 3Q call Nov 9 should clarify next steps and further move the stock. We expect (+)ve [positive] readthrough to other editing cos [companies] too,” Jefferies equity analyst Maury Raycroft, PhD, wrote Wednesday in a research note. “The bar for FDA has been unclear, and NTLA now sets precedent for others to follow.”

He said Intellia had noted to him that while global trial start-up activities will start, “actual dosing may begin early ’24 depending on how fast things move.”

Raycroft added that he and other Intellia watchers will be seeking more specifics about the size and duration of the Phase III trial compared to the pivotal trials for other non genome-edited therapy developers of ATTR amyloidosis-caused cardiomyopathy treatments.

Pfizer (PFE) crossed the proverbial finish line first when it won FDA approval in 2019 for its wild-type or hereditary ATTR amyloidosis treatments, Vyndaqel^® (tafamidis meglumine) and Vyndamax^® (tafamidis). Each uses a different form of active ingredient tafamidis (micronized meglumine salt and free acid form, respectively), and each is taken a different dosage.

The Pfizer drugs are expected to be joined soon by treatments being developed by other companies—a group that includes Anlylam Pharmaceuticals (ALNY), BridgeBio Pharma (BBIO), and the tandem of Ionis Pharmaceuticals and AstraZeneca (IONS/AZN). Those treatments “pose substantial headwinds” to Intellia’s NTLA-2001, observed David Nierengarten, PhD, managing director and head of equity research focusing on biotech for Wedbush Securities, according to Investor’s Business Daily.

However, whatever headwinds Alnylam posed to Intellia have been significantly stilled.

As Raycroft commented, Alnylam saw a setback to development of patisiran for cardiomyopathy of ATTR amyloidosis on October 9 when the FDA refused to approve Alnylam’s supplemental NDA for the RNA interference (RNAi)-based therapy already marketed as Onpattro^® for polyneuropathy of hereditary ATTR amyloidosis in adults. Instead, the agency sent Alnylam a Complete Response Letter stating that data from the company’s Phase III APOLLO-B trial (NCT03997383) had not established the clinical meaningfulness of patisiran’s treatment effects in ATTR amyloidosis. Alnylam responded by saying it was no longer pursuing the additional indication in the U.S.

Earlier this year, BridgeBio and Ionis/AstraZeneca announced positive Phase III results for their ATTR amyloidosis candidates—acoramidis and eplontersen, respectively.

Intellia is among a half-dozen genome editing therapy developers with key clinical and regulatory inflection points to watch in coming months. Following is a roundup of those companies, their anticipated events, and recent actions by analysts covering the company:

Beam Therapeutics (BEAM)

Inflection Points: BEAM restructured operations and reprioritized its pipeline on Thursday (see above), listing first its ex vivo and in vivo sickle cell disease programs, which include BEAM-101—for which the company anticipates reporting initial data in 2024 on multiple patients from its Phase I/II BEACON trial (NCT05456880) assessing BEAM-101 in severe SCD.

In August, BEAM said it anticipated having enough currently consented patients to fill a three-patient sentinel cohort and launch an expansion cohort. Beam will continue adding additional patients to the BEACON trial through the end of year and beyond, until it reaches a total target of 45 treated patients. The trial has an estimated primary completion date of February 1, 2025.

Significance: BEAM-101 is an ex vivo therapy that produces base edits designed to potentially alleviate the effects of SCD by mimicking genetic variants seen in individuals who have hereditary persistence of fetal hemoglobin.

Other catalysts: BEAM is also prioritizing development of BEAM-302 in AATD, saying in August it expected to submit a regulatory filing in the first quarter of 2024 to begin a clinical trial. A similar filing is expected in the first half of 2024 for BEAM-301 in GSD1a, with BEAM saying Thursday that an initial clinical trial is still planned.

BEAM-301 is a liver-targeting lipid nanoparticle (LNP) formulation of base editing reagents designed to correct the R83C mutation—the most common mutation responsible for causing GSD1a. BEAM-302 is a liver-targeting LNP formulation of base editing reagents designed to correct the PiZ allele, the most common gene variant associated with severe AATD.

However, BEAM is seeking a partner for BEAM-201, for which it dosed the first patient with BEAM-201 in a Phase I/II trial (NCT05885464) assessing the CD7+ relapsed/refractory T-ALL/T-LL (T-cell lymphoblastic leukemia) in August. The trial has an estimated primary completion date of December 2031. BEAM-201 is, according to Beam, the first quadruplex-edited, allogeneic CAR-T cell therapy candidate in clinical-stage development, and the first treatment with a base editing candidate in the U.S.

Analyst action: Cantor Fitzgerald’s Rick Bienkowski on Tuesday lowered his firm’s 12-month price target on Beam shares 43%, from $56 to $32, but maintained its “Overweight” rating.

Caribou Biosciences (CRBU)

Inflection Point: CRBU expects to begin patient enrollment in the Phase I AMpLify trial by mid-2024. AMpLify is designed to assess the safety and tolerability of a single administration of CB-012 for relapsed or refractory acute myeloid leukemia (r/r AML) at dose level 1 (25×10⁶ CAR-T cells). The FDA has cleared Caribou’s IND for the trial, the company said Wednesday.

Caribou said it is beginning Part A of AMpLify, a 3+3 dose escalation design that will evaluate the safety and tolerability of CB-012 at ascending dose levels to determine the maximum tolerated dose and/or the recommended doses for expansion. Part B, the dose expansion portion, has as its primary objective determining antitumor response, assessed by overall response rate (ORR), after a single dose of CB-012. AMpLify will include patients who have not responded to or relapsed after standard treatment and will exclude patients who have been treated with more than three prior lines of therapy and patients with proliferative disease.

Significance: According to CRBU, CB-012 is the first allogeneic CAR-T cell therapy with both checkpoint disruption through a PD-1 knockout, and immune cloaking through a B2M knockout and B2M–HLA-E fusion transgene insertion.

Analyst action: Nothing since July 26, when HC Wainwright’s Robert Burns lowered his firm’s price target 8%, from $25 to $23, but maintained its “Buy” rating.

CRISPR Therapeutics (CRSP) and Vertex Pharmaceuticals (VRTX)

Inflection points: The FDA’s Cellular, Tissue, and Gene Therapies Advisory Committee will meet October 31 to recommend how the agency should act on exagamglogene autotemcel (exa-cel), the companies’ autologous, ex vivo CRISPR/Cas9 gene-edited for severe sickle cell disease (SCD) and transfusion-dependent beta thalassemia.

The FDA, which typically heeds the advice of its “adcomms,” has set for December 8 its Prescription Drug User Fee Act (PDUFA) target action date on the companies’ biologics license application (BLA) for exa-cel in SCD. In beta thalassemia, the agency has set a PDUFA date of March 30, 2024.

Significance: If approved, exa-cel would be the first CRISPR-Cas9 gene-edited therapy to win FDA approval.

Other catalysts: Cardiovascular candidate CTX310, which applies in vivo editing of the ANGPTL3 gene, is expected to enter the clinic by year’s end; Atherosclerotic cardiovascular disease candidate CTX320 is expected to begin clinical trials in the first half of 2024.

Analyst action: Cantor Fitzgerald’s Eric Schmidt on Tuesday downgraded CRSP shares from “Overweight” to “Neutral.” Mizuho’s Salim Syed, however, initiated coverage of CRSP on September 27 with a “Buy” rating.

Editas Medicine (EDIT)

Inflection Point: Editas’ EDIT-301, an ex vivo autologous CRISPR gene edited gene-edited CD34+ hematopoietic stem and progenitor cell therapy candidate, received the FDA’s Regenerative Medicine Advanced Therapy (RMAT) designation on Monday. EDIT-301 is on track to dose 20 total sickle cell disease (SCD) patients in the Phase I/II RUBY trial (NCT04853576), and deliver a clinical update on the study, by the end of this year, the company said in August.

In June, Editas presented positive initial clinical safety and efficacy data from the RUBY trial in an oral presentation at the European Hematology Association (EHA) Hybrid Congress in Frankfurt, Germany, and in a company-sponsored webinar.

Significance: In EDIT-301, patient-derived CD34⁺ hematopoietic stem and progenitor cells are edited at the gamma globin gene (HBG1 and HBG2) promoters, where naturally occurring fetal hemoglobin (HbF) inducing mutations reside, by a highly specific and efficient proprietary engineered AsCas12a nuclease. Red blood cells derived from EDIT-301 CD34⁺ cells have shown a sustained increase in fetal hemoglobin production, which according to Editas could provide a one-time, durable treatment benefit for people living with severe SCD and TDT.

The RUBY trial marked the first time that a novel type of CRISPR gene-editing technology—CRISPR/CA12—was used in a human clinical study to alter the defective gene, according to the scientists.

Other catalysts: SCD is one of two indications for which Editas is developing EDIT-301; the other is transfusion-dependent beta thalassemia (TDT), for which Editas also has a clinical update planned by year’s end, from the Phase I/II EDITHAL trial (NCT05444894). Editas presented positive initial clinical safety and efficacy data from the first EDITHAL patient in June, in a company-sponsored webinar.

Analyst action: J.P. Morgan’s Brian Cheng on Wednesday upgraded his firm’s rating on EDIT stock from “Underweight” to “Neutral,” and announced a price target of $8 a share. However, Cantor Fitsgerald’s Eric Schmidt downgraded EDIT on Tuesday from “Overweight” to “Neutral.” Last month, Stifel’s Dae Gon Ha upgraded the stock from “Hold” to “Buy” and nearly doubled his firm’s price target, from $9 to $17.

Intellia Therapeutics (NTLA)

Inflection Point: Intellia said Wednesday its NTLA-2001, being co-developed with Regeneron Pharmaceuticals (REGN), won FDA clearance of its IND application for a trial assessing the in vivo CRISPR-based therapy as a treatment of transthyretin (ATTR) amyloidosis with cardiomyopathy. The decision paves the way for a global Phase III study of NTLA-2001 that is expected to start by the end of this year. In a statement, Intellia President and CEO John Leonard, MD, said the company will share details about that pivotal trial on its third-quarter earnings call with analysts, set for November 9.

Significance: NTLA-2001 is the first first-ever investigational in vivo CRISPR-based gene editing therapy cleared to enter late-stage clinical development when the FDA cleared. If approved by the agency, it could potentially be the first single-dose treatment for ATTR amyloidosis, according to Intellia.

Other catalysts: NTLA-2002, an in vivo CRISPR-based treatment candidate for hereditary angioedema, earlier this month was granted the European Medicines Agency (EMA)’s Priority Medicine (PRIME) designation. NTLA-2002 is set to start a global pivotal Phase III trial as early as Q3 2024 “subject to regulatory feedback,” Intellia said in August, following release of positive Phase I data including extended data announced in June. According to Intellia, NTLA-2002 is the first single-dose investigational treatment being explored in clinical trials for the potential to continuously reduce kallikrein activity and prevent attacks in people with HAE.

Analyst action: Nothing since September 13, when Cantor Fitzgerald’s Rick Bienkowski maintained his firm’s “Overweight” rating and $65 a share price target on the stock.

Prime Medicine (PRME)

Inflection Point: PRME expects to submit an IND in 2024 for its first clinical candidate to the FDA, the company’s co-founder, prime editing and base editing pioneer David R. Liu told an investor conference earlier this month.

While the company has not identified that candidate, its pipeline shows only one of its 18 programs has reached the phase of IND-enabling studies—a blood-targeting candidate for chronic granulomatous disease (CGD), designed to be administered ex vivo. Additional IND filings are anticipated in 2025, Prime Medicine said in a company presentation to investors last month.

Significance: If Prime wins FDA clearance for its IND, it could be the first drug developer to bring a base edited therapy into the clinic. By contrast, base editing technology, first disclosed in 2016 by Liu’s lab—is under investigation in six ongoing clinical trial.

Other catalysts: Three other programs in Prime’s pipeline are in lead optimization phases—a Wilson’s disease candidate targeting liver tissue and using lipid nanoparticle (LNP) delivery; a retinitis pigmentosa/rhodopsin candidate targeting eye tissue and using adeno-associated virus (AAV) vector delivery; and a neuromuscular tissue targeting candidate for Friedreich’s ataxia also delivered via AAV. The rest of Prime Medicine’s programs are in preclinical discovery phases.

Analyst action: BMO Capital’s Kostas Biliouris initiated coverage of PRME on October 9 with an “Outperform” rating and a price target of $19 a share. A month earlier on September 6, JonesTrading’s Justin Walsh initiated coverage with a “Buy” rating and a price target of $20 a share.

Leaders & Laggards

• Aldeyra (ALDX) shares plunged 66% on Monday, from $5.43 to $1.83, after it disclosed that according to minutes of a late-cycle review meeting with the FDA, the company “needs to conduct an additional clinical trial to satisfy efficacy requirements for reproxalap as a treatment for signs and symptoms of dry eye disease. Aldeyra quoted from the minutes: “[i]t does not appear that you have data to support the clinical relevance of the ocular signs to support your dry eye indication.” As a result, Aldeyra acknowledged, “the FDA may not be in the position to approve the NDA [New Drug Application] for reproxalap on or about the Prescription Drug User Fee Act (PDUFA) target action date of November 23, 2023 or afterwards, and it may issue a Complete Response Letter.”
• Assembly Biosciences (ASMB) shares rocketed 71%, from 73 cents to $1.25, after the company announced a 12-year partnership with Gilead Sciences (GILD) to advance R&D of novel antiviral therapies, focusing initially on herpes, hepatitis B, and hepatitis D viruses. Gilead agreed to pay Assembly Bio an initial $100 million consisting of $84.8 millionupfront and a $15.2 million equity investment. Gilead also agreed to pay at least $45 million per program after clinical proof-of-concept is achieved to opt into exclusive rights for each of Assembly Bio’s current and future programs,. If Gilead opts-in to any program, it will pay Assembly Bio up to $330 million per program tied to achieving regulatory and commercial milestones, plus royalties. Assembly Bio is also be eligible to receive three separate $75 million collaboration extension payments toward funding future R&D. Gilead shares rose 2% from $79.20 to $80.48.
• Evelo Biosciences (EVLO) shares plummeted 59% on Tuesday, from $2.91 to $1.20, after the company acknowledged that it had begun exploring strategic alternatives after its moderate psoriasis candidate EDP2939 failed the Phase II EDP2939-101 trial. EDP2939 missed the study’s primary endpoint of achieving a statistically significant difference in the proportion of patients who achieved an outcome of a 50% improvement from baseline in Psoriasis Area and Severity Index (PASI) score (PASI-50) between EDP2939 and placebo after 16 weeks of daily treatment. Evelo added that EDP2939 went from being inferior to placebo at week 16 (19.6% vs 25%) to being superior at the week 20 follow-up visit (33.9% vs. 26.9%).
• Nkarta (NKTX) shares more than doubled, zooming 112% on Tuesday from $1.48 to $3.14, after the company said the FDA had cleared its IND application to evaluate NKX019, its allogeneic, CD19-directed CAR NK cell therapy for lupus nephritis (LN). The company plans to launch a multi-center, open label, dose escalation clinical trial designed to assess the safety and clinical activity of NKX019 in patients with refractory LN. The study is designed to enroll up to 12 patients, with the first patient expected to be enrolled in the first half of 2024. Nkarta also disclosed plans to eliminate 18 jobs—about 10% of its workforce—among cost containment measures designed to extend its projected cash runway by one year into 2026.

Alex Philippidis is Senior Business Editor of GEN.

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Producing living cells as a therapeutic product is a complex process. To date, autologous-based cells comprise the majority of clinically-evaluated CAR T-cell products. Although autologous therapies can indeed be effective and life-changing for patients, this approach poses time and logistics constraints. Allogeneic cell products, generated using cells from healthy donors, can potentially overcome these limitations and provide the generation of “off-the-shelf” products.

But the technologies, solutions, and equipment needed to bring allogeneic cell therapies to large-scale clinical trials and global commercialization are not yet commercially available and that is, besides the biological challenge to guarantee immune evasion of these cells, one of the key bottlenecks facing the industry.

To capture the potential of using healthy donor stem cells as the basis for cell therapies, cells must be programmed in a way to avoid attack by the recipient’s immune system. Recent developments in gene editing technologies support strategies to design immune evasion.

“So now, we have the basis for moving from a single-patient autologous therapy to a one-to-many allogeneic therapy. However, we need the technologies, solutions, and equipment to make that possible,” pointed out Aaron Dulgar-Tulloch, PhD, chief technology officer, Cytiva. Cytiva and Bayer share a vision and common view of the challenges limiting the advancement of allogeneic cell therapy and believe that together they can overcome these challenges.

The companies are collaborating to build a fully-automated, modular platform that can be utilized for scaleup and manufacturing of multiple cell therapy products. The concept will use fully-characterized individual equipment modules that can be incorporated in a plug-and-play scenario. Both Dulgar-Tulloch and Bieringer believe this will accelerate the learning curve.

Human cells are fragile

Dealing with living cells as a therapeutic product makes the processes more complex than traditional biotherapeutics. Depending on the therapeutic application, different types of cells must be processed. These cells, which may need to be grown as aggregates, cell suspensions, or single cells, show higher sheer and nutrient and waste sensitivity relative to classical bioproduction cell lines.

In essence, the cells want to “feel good” in the corresponding reactors, which means that they require the right media composition. In addition, oxygen transfer and metabolic stress need to be precisely controlled. To provide the cells the optimal environment both the underlying biological process and the equipment performance must be optimized.

Enabling genomic medicines

The collaboration is focused on what the companies envision the entire genomic medicine field needs to bring cell therapies to patients faster. “If we are successful, we believe the entire community of therapy developers, technology providers and most importantly, patients, will benefit from accelerated, cost-effective, and globally available, allogeneic cell therapies,” said Dulgar-Tulloch.

The process began by aligning on the boundary conditions of the platform, i.e., the way to define the modularity (hardware and software plug-and-play), the automation and the process control concept. The initial focus is on two components with a current immense need: a 3D expansion system for production at scale and a robust harvest solution. As additional needs are identified other devices may follow.

The ultimate goal is to gather insights and offer solutions to a wide range of users driving the creation of an allogeneic cell therapy consensus platform. Bieringer emphasized that this will drive economies of scale and simplify global manufacturing, ultimately driving down costs to make allogeneic cell therapies more accessible.

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Carl C. Icahn has launched the next phase of his campaign for change at Illumina through a lawsuit filed this week in Delaware against former CEO Francis deSouza and board members.

Icahn’s lawsuit alleges that deSouza and board members breached their financial duty by directing Illumina’s three-year effort to acquire cancer blood test developer Grail, as well as the company’s defense of the $7.1 billion deal in the face of opposition from U.S. and European regulators.

The lawsuit comes four months after deSouza resigned as CEO following a proxy challenge from the activist investor that was partly successful. Shareholders of the sequencing giant ousted a deSouza ally as chair and elected to the board one of three allies nominated by Icahn.

The lawsuit was filed Tuesday in Delaware Chancery Court. However, the complaint on which the suit is based is not public and will not be until next week. The court allows complaints to be kept confidential pending potential redactions to be proposed by lawyers for Icahn and the defendants.

Illumina spokesman David McAlpine told GEN today that Illumina was reviewing the complaint.

Illumina investors appeared somewhat fazed by news of Icahn’s lawsuit. Shares of Illumina fell nearly 6% today, from $131.87 to $124.45. Shares of Icahn’s publicly-traded Icahn Enterprises stayed flat, inching up 0.5%, from $17.77 to $17.86.

Icahn disclosed his lawsuit yesterday during a “fireside chat at the 13D Monitor Active-Passive Investor Summit, a conference focused on shareholder activism; corporate governance; environmental, social, and governance (ESG) concerns.

“Throughout my long, long career as an activist, I have never found it necessary, until today, to sue a board of directors in this manner,” Icahn told the conference, according to Bloomberg News. “I continue to believe in the company’s long-term potential and I have full faith in Illumina’s new CEO, and its employees.”

In a statement Wednesday, Icahn said he decided to pursue the lawsuit because of “the board’s unconscionable and egregious actions relating to closing the acquisition of Grail without regulatory approval, thus putting Illumina, a great company, in harm’s way.”

Icahn has voiced public support for deSouza’s successor Jacob Thaysen, PhD, who became Illumina’s CEO effective September 25. While some market watchers questioned Thaysen’s lack of past CEO experience, Icahn posted on X, formerly Twitter:  “I think he will do an excellent job and he has my full support.”

deSouza’s resignation marked the second victory for Icahn in his effort to change the direction of Illumina’s management by reshaping its board. The first came in May, when Illumina shareholders ousted chairman John W. Thompson, who had ties to deSouza, and instead elected to Illumina’s board Andrew J. Teno, a portfolio manager at Icahn’s investment management firm Icahn Capital since October 2020.

Icahn’s case for change

During more than two months of open letters to Illumina shareholders—and in an exclusive interview on GEN’s “Close to the Edge” video series, Icahn and Teno stated their case for change at Illumina. That case rested on three key arguments:

• Illumina drained itself of resources by acquiring Grail and challenging regulators.
• Illumina’s stock price had shrunk to the point where the company had lost some $50 billion in market capitalization—the share price times the number of outstanding shares of a public company.
• Illumina’s board nearly doubled deSouza’s total compensation last year, to almost $27 million, with much of that increase based on stock options.

Speaking with GEN in April, Icahn cited an instance of what he considered a breach of duty by Illumina’s board—its decision to increase its insurance protection to board members before they approved the purchase to what he has termed an unprecedented level. That decision, Icahn concluded in March, reflected board reluctance to support the Grail acquisition absent additional personal liability protection above existing protections.

“This board realized—they must have—how crazy this was. So, they’re supposed to use their business judgment, their duty of loyalty, their duty of care. They didn’t use it,” Icahn said.

“If they were really lax to do a business judgment, and so if that is found, insurers may not cover them. But the board doesn’t seem to care,” Icahn lamented. “It’s a very, very interesting and strange situation. I’ve never seen one as bad as this, and I’ve been around a long time.”

Potential conflicts

Icahn has also raised the question of potential conflicts by deSouza and Illumina’s board between their duty to shareholders and their actions in the Grail acquisition—potential conflicts that he told shareholders on May 8 justified requesting a fairness opinion from an independent financial expert.

Icahn cited as one example deSouza’s years of personal friendship and professional relationships with John W. Thompson, a Grail shareholder who served as Illumina’s board chair from 2021 until he was ousted by shareholders in May.

Another example was Goldman Sachs’ role as Illumina’s financial advisor after having served as a lead underwriter for Grail in an attempted initial public offering (IPO) that it aborted when Illumina agreed to buy the company in 2020, saying the deal would accelerate the commercialization of its Galleri blood detection test, then being planned for launch in 2021.

In his May 8th letter, Icahn also introduced the possibility of a lawsuit: “We believe there are likely many more red flags [emphasis in original] that will be revealed if and when the members of Team Francis are forced to sit for depositions.”

During the GEN interview, Teno contrasted deSouza’s relationships with Thompson and the presence on the board of other deSouza allies with the traditional separation of powers between CEOs and board chairs: “Francis is picking the people he wants to be on the board and pushing them through his committee.”

Asked if the moves constituted too close a link between chairman and CEO, and thus a breach of fiduciary duty, Teno replied: “If you hired your friend of 20 years, you’ve known someone for 20 years, do you think they treat them a little differently than you treat someone you don’t know? I think the answer is absolutely. That’s why they have the separation of powers.”

Alex Philippidis is Senior Business Editor of GEN.

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As bioprocessing moves forward, companies hope to keep better track of production. A key goal is in-line analysis. This “enables continuous monitoring and control of critical process parameters in upstream bioprocess development,” says Chris Brown, PhD, co-founder and chief product officer at 908 Devices. “In-line measurements of cell cultures occur directly in a bioreactor with no sample volume loss.”

As a result, in-line analysis provides many benefits. Brown mentions sample integrity, preserving costly media, reducing waste and contamination risk, and improving product quality. “In-line analysis also saves operator time compared to manual sampling, which is labor intensive,” Brown says.

In addition, in-line analysis allows bioprocessors to improve the control of production. As Brown notes, this form of analysis “provides real-time monitoring of a process, allowing for immediate corrective action to be taken along with rich data to better support efforts in predictive bioprocess modeling.”

Challenges remain

Nonetheless, challenges stand in the way of reaching that goal. “As the biopharmaceutical industry adopts process analytical technology—PAT—to drive the advancement of Biopharma 4.0, scientists need an array of tools that provide timely measurements of critical process and product quality attributes,” Brown says.

For now, scientists need better tools to accomplish these goals. “The power of Raman spectroscopy for in-line bioprocess analysis is well known, but the expense and expertise required to develop robust and sustainable multivariate models is a massive impediment,” Brown says. “For Biopharma 4.0 to advance, scientists need a suite of devices that offer easy-to-integrate in-line analysis and control without the need for substantial expert configuration.”

Fortunately, existing technology can address the challenges and realize the potential of in-line analysis.

“There are solutions available now that can offer all the advantages of Raman spectroscopy without the cost and complexities associated with conventional spectroscopic methods,” Brown says. “These are turn-key solutions that provide real-time, in-line monitoring and control of multiple bioprocess parameters with no modeling or development required.”

This approach relies on “purpose-built de novo models that automatically process Raman spectra from a wide variety of cell culture media types and cell lines, delivering actionable process parameters in minutes,” Brown says.

Overall, in-line analysis could transform much of bioprocessing. As Brown sums it up: “In-line analyzers enable biopharmaceutical process development scientists and manufacturers to enhance process understanding and implement dynamic control strategies quicker and easier.”

The post In-Line Analytical Benefits and Challenges appeared first on GEN - Genetic Engineering and Biotechnology News.

Making autologous cell therapies is a logistical challenge as much as a technical one. Material from the hospitalized patient must be transferred to a facility for processing before being returned for administration, all of which takes time and costs money.

In-hospital production is emerging as a viable alternative, which suggests a new generation of automated cell processing technologies could simplify and reduce the cost of making these innovative cures.

Stephan Kadauke, MD, PhD, assistant professor of clinical pathology and laboratory medicine at the University of Pennsylvania’s Perelman School of Medicine, calls these bedside, automated cell processing systems, “GMP-in-a-box.”

“Good manufacturing practice in a box essentially condenses the complex cell therapy manufacturing process into a more compact and automated system that can be housed within a hospital,” he says. “This not only automates an error-prone manual process but also eliminates the need to send cellular materials to centralized manufacturing facilities. We found that this can reduce the cost associated with delivery of novel cell therapies like CAR-T cells to patients. So the advantage is not just in cost, speed, and quality control, but also in patient access.”

Minimizing operator handling

In the study, Kadauke and co-authors looked at a range of in-hospital cell therapy production technologies and found that, although the platforms differ, all of them are designed to link multiple production steps while minimizing operator handling.

“The currently available systems involve a variety of technologies that handle cell selection, culturing, and quality control. Automation plays a significant role in these processes,” he points out. “The goal is to create a ‘one-stop-shop’ for producing cell therapies. The two most mature platforms are the Miltenyi CliniMACS Prodigy and the Lonza Cocoon. However, others are coming.”

Demand for these systems is likely to increase as healthcare professionals seek to improve access to cell therapies, according to Kadauke.

“In-hospital manufacturing is still relatively novel but is gaining traction. A few pioneering hospitals have already implemented such systems, and we expect to see more widespread adoption as the technology matures, especially in parts of the world that currently do not have access to these therapies.”

In addition, Kadauke predicts biopharmaceutical manufacturers will be interested in GMP-in-a-box systems.

“Biopharmaceutical companies also take advantage of GMP-in-a-Box systems to benefit from cost savings due to automation and standardized workflows, though our article focused on in-hospital applications,” he tells GEN. “A large wave of commercial cell therapy products is expected to hit the market in the next year or so, and products manufactured in-hospital with GMP-in-a-box systems will complement and coexist with current and novel commercial cell therapies.”

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Although water’s shear viscosity is important in accurate molecular dynamics modeling, the results from two popular water models differ from those of actual experiments by as much as 20%. In a recent paper, Tadashi Ando, PhD, associate professor at Tokyo University of Science, compared shear viscosity predictions for the four-point Optimal Point Charge (OPC) and three-point OPC (OPC3) models with results from physical experiments. Temperatures ranged from 273°K to 373°K.

Water viscosity for the OPC and OPC3 water models has not been reported in the literature previously. Yet, they are important when evaluating molecules’ self-diffusion coefficients in an infinite system in comparison to molecular dynamic simulations.

Detailing the results in The Journal of Chemical Physics, Ando reported the OPC and OPC3 models were accurate for temperatures above 310°K. Below that, they “systematically underestimated the shear viscosity.” At temperatures of 273°K and 298°K, the calculated viscosities were, respectively, 20% and 10% lower than the experimental values.

Significantly more accurate

Overall, Ando found OPC and OPC3 were significantly more accurate than other popular water models, such as Transferable Intermolecular Potential three-point (TIP3P) or extended Simple Point Charge (SPC/E) models. Other water models—specifically the TIP4P/2005, TIP4P-FB, and TIP3P-FB—predicted shear viscosity more accurately at temperatures below 293°K.

Knowing viscosity differences between models and the actual experiments is important, Ando tells GEN. “Most drugs and biological molecules, such as proteins, DNA, and polysaccharides, exist in an aqueous environment. The presence of water molecules around these molecules significantly affects their dynamics and interactions. Therefore, developing more accurate water models and their quality assessments are also important for successful biomolecular simulations and in silico drug design.”

The OPC and OPC3 water models are “among the best nonpolarizable water models, accounting for the various static and dynamic properties of water,” he says. However, “Most biomolecular models and their force fields have been developed with older water models. Therefore, simply using the OPC/OPC3 water models with many of the existing biomolecular force fields would not yield satisfactory results.”

Improvements are available. “Recently,” Ando says “AMBER, a well-known molecular simulation software and biomolecular force fields developer, developed a protein force field whose performance is improved by using the OPC water model.” Additional biomolecular force fields are likely to be developed with OPC water models to yield more accurate biomolecular simulations.

Ando’s paper may not have a profound, immediate impact on the industry, he says. Instead, it enables deeper understanding of several of the most popular water models so biopharmaceutical manufacturers can select the most appropriate for their biomolecular simulations.

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Analytical techniques for cell counting and surface marker analyses are improving to meet the needs of cell therapy developers; That’s the view of Lara Silverman, PhD, principal consultant at LIS BioConsulting.

According to Silverman, the growth in advanced therapies is leading to analytical techniques for cell counting beyond, for example, the hemocytometer.

“The analytical space was stagnant, but it’s starting to change because of developments in the bioprocessing world,” Silverman explains. “It’s no longer enough to take the binary approach of knowing if cells are alive or dead. You need to know what cells are doing and how they’re responding to a process.”

Companies might need to know whether cells are metabolically active, alive but no longer expressing a therapeutic marker, or alive but in apotheosis. Although the field is developing techniques for cell counting and identifying surface markers, Silverman says there’s still a delay in the development of new potency assays.

“That might be the reality of our industry [… as] a lot of companies keep their potency assays private because they take so long to develop,” she continues. “But there aren’t yet any ground-breaking discoveries or companies that can consistently support a diverse array of potency assays to streamline [analytics for therapy developers].”

Understanding process deviations

Going forwards, Silverman sees in-process analytics and artificial intelligence as helping to better understand process deviations, reducing the number of failed lots.

“It will require the integration of a tremendous amount of data and analytics, especially for treatments that are lifesaving, such as CAR-T, where the patient may die if they don’t receive the product,” she says.

Analytics could also be used to personalize medicines to the characteristics of the patient, although Silverman believes this may be some time away. “It’s really exciting, but I think the industry is a little scared to dip their toes into it because advanced therapy manufacturers are already challenging the FDA with their drug products.”

Silverman also sees new analytical instruments, such as the Accellix benchtop flow cytometer, as aiding the trend towards decentralized manufacturing.

“Flow cytometry has changed little in many decades. It’s extremely time-consuming and requires manual handling,” she says. “With the Accellix system, you just load your cells into a plastic cartridge that has a specific set of surface markers associated with it, and pop it into a tiny machine, so it’s something that could go on the manufacturing floor rather than in a QC lab.”

Silverman also thinks other instruments, such as the Dynex system for fully-automated ELISA testing, could aid decentralized manufacturing by reducing human error between testing sites. 

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Tal Danino, PhD, and Rosa L. Vincent, PhD, at Columbia University’s department of biomedical engineering, and colleagues, reported on their developments in Science, in a paper titled “Probiotic-guided CAR-T cells for solid tumor targeting,” in which they concluded, “These findings highlight the potential of the ProCAR platform to address the roadblock of identifying suitable CAR targets by providing an antigen that is orthogonal to both healthy tissue and tumor genetics … Overall, combining the advantages of tumor-homing bacteria and CAR-T cells provides a new strategy for tumor recognition and, in turn, builds the foundation for engineered communities of living therapies.”

Immunotherapies using CAR-T cells have proven successful in treating some types of blood cancers, but their efficacy against solid tumors remains elusive. A key challenge facing tumor-antigen targeting immunotherapies like CAR-T is the identification of suitable targets that are specifically and uniformly expressed on solid tumors, the authors noted. “A key challenge of antigen-targeted cell therapies relates to the expression patterns of the antigen itself, which makes the identification of optimal targets for solid tumor cell therapies an obstacle for the development of new CARs.” Solid tumors express heterogeneous and nonspecific antigens and are poorly infiltrated by T cells. As a result, the approach carries a high risk of fatal on-target, off-tumor toxicity, wherein CAR-T cells attack the targeted antigen on healthy vital tissues with potentially fatal effects. “Few tumor-associated antigens (TAAs) identified on solid tumors are tumor restricted, and thus, they carry a high risk of fatal on-target, off-tumor toxicity because of cross-reactivity against proteins found in vital tissues,” the team continued.

Previous studies have shown that, unlike CAR-T cells, which require “considerable engineering to target and infiltrate solid tumors,” some species of bacteria can selectively colonize and preferentially grow within the hostile tumor microenvironments (TMEs) of immune-privileged tumor cores, and can be engineered as antigen-independent platforms for therapeutic delivery.

In this study, Vincent, Candice Gurbatri, and colleagues combine probiotic therapy with CAR-T cell therapy to create a two-stage probiotic-guided CAR-T cell (ProCAR) platform, whereby T cells are engineered to sense and respond to synthetic CAR targets that are delivered by solid tumor-colonizing probiotic bacteria. “This approach leverages the antigen independence of tumor-seeking microbes to create a combined cell therapy platform that broadens the scope of CAR-T cell therapy to include difficult-to-target tumors,” the investigators explained.

Using synthetic gene circuit engineering on a well-characterized non-pathogenic strain of E. coli, Vincent et al. created a probiotic that could infiltrate and cyclically release synthetic CAR targets directly to the tumor core, effectively “tagging” the tumor tissue. “With this system, bacterial growth reaches a critical population density exclusively within the niche of the solid TME and subsequently triggers lysis events that cyclically release genetically encoded payloads in situ,” they further explained.

Then, CAR-T cells that were programmed to recognize the probiotic-delivered synthetic antigen tags could be generated that homed in on the tagged solid tumors, killing the tumor cells in situ. The scientists also engineered probiotics that co-released chemokines in addition to synthetic targets to further enhance CAR-T cell recruitment to the tumor, further boosting therapeutic response.

Vincent et al. tested the resulting probiotic-guided CAR-T cell platform in humanized and immunocompetent mouse models of leukemia, colorectal cancer, and breast cancer and showed that it resulted in the safe reduction of tumor volume. “Collectively, these mouse model data demonstrate the use of engineered probiotics to selectively grow within the TME niche and safely release combinations of CAR-T cell enhancing payloads in situ,” they wrote. The team acknowledged that further development of the system will be needed before it can be considered for clinical application. Nevertheless, they stated, “We have demonstrated an approach to engineering interactions between living therapies, in which tumor-colonizing probiotics have been repurposed to guide the cytotoxicity of engineered T cells.”

In a related Perspective, Eric Bressler, PhD, and Wilson Wong, PhD, at Boston University Biomedical Engineering and Biological Design Center, also noted, “Translation of the ProCAR system to the clinic will depend on scalability to larger tumors and attenuation of bacterial strains for safety.” However, they concluded, “The study of Vincent et al. is an important proof-of-concept for a potential approach to treating heterogeneous, immunologically cold, and poorly infiltrated solid tumors.”

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Carlsbad, CA—The timing of the Cell & Gene Meeting on the Mesa appears to have been prearranged with the help of a crystal ball. Members of the cell and gene therapy field are anxiously awaiting the FDA’s review of three submissions before the end of 2023: two treatments for sickle cell disease—exa-cel (Vertex and CRISPR Therapeutics) and lovo-cel (Bluebird)—as well as Bristol Myers Squibb and 2Seventy Bio’s Abecma for earlier multiple myeloma.

The sector is at an inflection point. There’s a lot of excellent science and exciting clinical results. Still, it remains to be seen whether that will translate into commercial success—a major focus of this week’s Alliance for Regenerative Medicine (ARM) conference. 

Regulatory approval

All eyes, therefore, are on Nicole Verdun, MD, the new permanent director of the FDA’s Office of Therapeutic Products (OTC), which is within the Center for Biologics Evaluation and Research (CBER). Verdun’s plate has a healthy serving of cell and gene therapy clinical trials for rare and serious diseases, which typically do not fit the testing paradigm of a randomized clinical trial. According to Verdun, who will be working hand in hand with CBER director Peter Marks, MD, PhD, the key to the approval of cell and gene therapies for conditions with just a handful of patients is a mix of communication and regulatory flexibility.

“We have INDs open for diseases where there are 11 patients in the United States,” said Verdun. “There needs to be increased communication earlier on in the development process, and there has to be consideration for the disease, the benefit-risk for how rare it is, and we have to do what we can to partner to get more of these therapies to patients that need them.”

To get right at this, Verdun highlighted the “Support for clinical Trials Advancing Rare disease Therapeutics” (START) Pilot Program. Three chosen START participants must be sponsors of cell and gene therapies for rare diseases and serious conditions currently in clinical trials under an active Investigational New Drug Application (IND). These participants will be able to receive regular advice and ad hoc communication with FDA staff to talk about product-specific development issues, such as clinical study design, choice of the control group, and fine-tuning the choice of the patient population. START will begin accepting applications between January 2 and March 1, 2024. 

Manufacturing and commercialization

 As more cell and gene therapies begin to move into the clinic, there is growing attention on manufacturing, which may be the major bottleneck for creating commercialized products.

Automation and artificial intelligence (AI) will be major disruptors to the manufacturing and commercializing cell and gene therapy. The efforts made by Cellares with its Cell Shuttle to integrate batch processing and automation into the assembly process serve as evidence of this. But automation and AI will not be enough.

According to Ann Lee, PhD, chief technical officer at Prime Medicine, there are three key factors to developing commercial-grade manufacturing. The first is picking the right people, because getting a cell and gene therapy program into the clinic requires a breadth of expertise that will likely not be found in a single individual. The second is data infrastructure, because to generate data that will be submitted for an IND or BLA submission, processes need to be in place where it is retrievable, tracked, and analyzed. Third, Lee said that regardless of going the internal or external route, the process needs to be transparent because no cell or gene therapy will be approved if the manufacturing process is a black box.

Some key factors go into choosing to partner with an external CDMO for manufacturing or bringing it in-house, often touted as the best way to control one’s destiny. While many have approached the manufacturing of cell and gene therapies with the view to putting all their manufacturing capabilities into the hands of partner CDMOs, some have decided to take this on to various degrees to gain increased control of their medicine’s destiny.

For cell therapies, some of this may come down to whether a company’s approach uses allogeneic or autologous cells. Sumit Verma, senior vice president of Global Strategic Manufacturing at Iovance Biotherapeutics, said that, while there is a lot of allogeneic work being done and CAR T having that success rate, autologous cell therapy has its place as a potentially unrivaled personalized medicine but is incredibly challenging from a logistics side. “For the patient’s benefit, being able to manufacture [an autologous cell therapy] batch is a key concept that I think you’re going to see a lot more maturity next year,” said Verma.

With two autologous cell therapy, using patient-specific tumor-infiltrating lymphocytes and peripheral blood lymphocytes (PBL), Iovance has taken an approach to investing in both their own manufacturing capabilities, as evidenced by their recent investment in establishing the Iovance Cell Therapy Center (iCTC)—a 136,000-square-foot facility in Philadelphia.

While Intellia Therapeutics will also be opening a new manufacturing facility in Waltham, Massachusetts, in 2024, chief business officer Derek Hicks said that in this market environment, he wouldn’t be surprised if there are more deals featuring a shared partnership between manufacturing and smaller biotechs.

“When you think about manufacturing, it’s not just that shared risk,” said Hicks. “It is how can you work with someone that actually helps you accelerate because we’re trying to get these products to patients. The research is moving very quickly, so how do you ensure that manufacturing doesn’t stop you from bringing things forward? These are the things that we all need to think about.”

Healthcare systems

Bob Smith, senior vice president of the Global Gene Therapy Business at Pfizer, said a lot of his concern for getting cell and gene therapies commercialized is related to the healthcare systems in the U.S. and abroad.

“A lot of healthcare systems have a negative innovation bias in the way that they evaluate and value the innovations that our sector is developing,” said Smith. “No individual company is going to be able to overcome this, and I think we need to think about how we communicate not just with the healthcare systems and how they evaluate not just the regulatory aspects, but now really the value of what we’re bringing to patients.”

For example, Smith points to some European markets where sometimes there isn’t a price approval for a year and a half after the regulatory approval.

“Think about the burden that is on small midsize companies that don’t have a balance sheet like [Pfizer does],” said Smith. “We can absorb that financial hit, but it’s going to put a tremendous financial strain on capital-intensive companies, and we need to really think through how we can change that paradigm to be much more efficient, principally for the benefit of patients but also, quite frankly, for the sustainability of the sector.”

Phil Cyr, senior vice president at Precision Value & Health, said that historically, a lot of payers and health technology organizations have been very focused on cost-effectiveness, but that they’ll also be looking at the budget impact and affordability, especially as cell and gene therapy begin to move into more prevalent diseases, which he believes will happen. Cyr thinks that the way to overcome this is by developing an evidence base to discourage people from thinking about sticker price and more towards long-term value.

“How do you go to a payer with a three to four-year window and make them understand that [gene therapy] will benefit them?” said Cyr. “I can think of one payer that actually built a model to figure out how long they needed to keep that member in their plan to recoup the money.”

For these reasons, organizations like Express Scripts and Cigna’s Embarc will play a key role in the future of gene therapies by helping protect customers from the high cost of gene therapy drugs and ensure access for those who need them.

 Expectations for 2024

Much is riding on the cell and gene therapy submissions that are due to be reviewed by the FDA before the end of this year. If they are successful, its possible that there will be a change in sentiment within the investor community—not to mention patients.

Next year, the Cell and Gene Therapy Meeting on the Mesa will move to Phoenix, Arizona, as the conference has maxed out its current capacity at the Park Hyatt Aviara Resort in northern San Diego. If the FDA approves these initial submissions, the new venue will likely be filled in 2024. But what if they’re not approved? All it takes is one bad batch that will reflect poorly on the entire industry.

As regulatory submissions and clinical data trickle in, there has to be a high standard. But standardization will not be achievable by a single business entity or the FDA alone. This new and evolving field will require organizations like ARM to unite different voices. That’s exactly what’s happening right now at the Cell and Gene Meeting on the Mesa.

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Carlsbad, CA—Across the board, biotech investing in 2023 has seen a retraction from the high levels seen the past three years: venture investment has dropped and companies large and small have lost value. However, that doesn’t mean that biotech investors have lost interest or abandoned ship. In fact, with the FDA reviewing submissions for three cell and gene therapies in Q4, investors are looking beyond the discovery and development phase and into the manufacturing and commercialization of these potentially revolutionary medicines—a theme that has taken hold at the 2023 Cell and Gene Meeting on the Mesa.

To get there, cell and gene therapy companies will have to do more than fly by on the seat of their pants, hoping to just live another day. Instead, there’s a sentiment amongst investors that now is the time to show a vision for the long run if biotech hopes to have financial support to carry them through until the headwinds die down and into the tailwinds for smooth sailing. 

Is this the new normal?

According to Dynamk Capital’s market analysis, the size and count of deals—mergers and acquisitions (M&A) and initial public offerings (IPOs)—have dropped from the 2020 to 2022 levels through the pandemic. But with three quarters complete in 2023, their analysis shows that the industry numbers are on par with 2018 and 2019 levels, perhaps even higher. Beyond some outliers such as Danaher’s acquisitions of Aldevron and Cytiva as well as the Thermo-PPD deal, Daniella Kranjac, founding partner and managing director at Dynamk Capital, said the trend for deals is pretty healthy.

While recent transactions aren’t pulling in deals of 20x revenue as seen during the pandemic, they’re also not at the 3–6x revenue multiples seen in 2018–2019. The industry is at the “new normal,” she said, which is in the 10–15x range.

Valerie Dixon, managing director at Morgan Stanley, says it is less a “new normal”, and more of a reversion to the historical mean. It is foolish to hope for the same “irrational exuberance” of the market to return to pandemic levels and that things won’t change back to how they were in 2020 and 2021, she said.

“They’re not going to be saved by a white knight and get 15x as much revenue for their company. That’s not happening!”

Kicking the can down the road

While some investors, board members, and founders have been trying to stay afloat in the turbulent economic climate, Dixon said the perception that they can just kick the can down the road and stretch their cash for another two to four quarters is irrational, even in the context of recent geopolitical events—Russia and Ukraine and now Israel and Palestine.

“You can’t manage your balance sheet anticipating World War III,” said Dixon. “You need to be managing your own business for a two to three-year timeframe, not for next quarter or making that month’s quota.” Instead, Dixon believes that managing a biotech business today requires creating long-term, enduring, profitable growth. That’s what funders think is most credible.

“When you can tell a story about how you’re investing for long-term growth, then [the investors] will be there for your expansion capital or your growth capital when you need it,” said Dixon. “If they take that long-term mindset with you, that means that you can have confidence that they’re going to have capital that’s going to grow with you along the way. It’s not growth at any cost; it’s making sure you’re doing responsible growth and you’re hitting… milestones that will get you to that next inflection point.”

While Sean Mackay, Operating Partner at Casdin Capital, is excited about the numerous companies with great products in great markets, he won’t invest in a company if they can’t support their own operating expenses. For Mackay, it comes down to the return on investment from capital.

Consistency is key, Mackay insisted. He wants to know that a prospect’s revenue isn’t random and that a particular move is devoted to a big market that the company is creating or disrupting, which is harder to do. A company’s capital-raising process has to increase the number of shots on goal and, thus, increase the probability of raising the money. To succeed, Mackay says companies need to be creative and expand their funnel instead of just hopping to the next shiny thing.

To IPO or not IPO

Although there have been signs of life for investing in healthcare and biotech—nine deals so far in 2023 (eight in biotech)—today, only three are trading around issue price. Some 2021 biotech IPOs, Dixon notes, are trading as low as 85% below the original issue price.

“Just because you’re going public doesn’t mean everything’s great,” said Dixon, who has led Morgan Stanley’s efforts in life sciences tools and diagnostics. “You still have to pay attention to aftermarket performance… and not just be the first one out of the gate. Be consistent in execution and a good steward of the capital that you raise. Maybe they [went] public too early, took their eye off the ball, or any number of factors—all those things play into the success of an IPO.”

Kranjac’s guidance to founders trying to get term sheets done in this market environment and the near future is to make sure they are thinking about who they bring to the table— board members and investors who understand the market and can be helpful in terms of forging additional relationships, whether for investments, operations, or talent.

There is no magic wand to secure a deal sheet for financing, but Kranjac shared the advice she can give the founder of an early-stage company: although they may have the luxury of being pre-revenue and not having reportables on a monthly or quarterly basis, they should be raising as much money as possible.

“In this environment, the guidance that we’re giving our portfolio companies, and even companies that we’re looking at going forward, is don’t wait,” said Kranjac. “There were a number of folks that early in the year said, ‘We’re going to wait until the fall when the market’s better or until [JP Morgan] 2024, when things are going to be great. Don’t wait!”

As to how to value a company, Mackay said that during the 2019 and 2022 period, research analysts might have understood the liquidation value for a sale. But when there’s no M&A activity, that number is more difficult to calculate. The huge push by big pharma to invest in new therapeutic modalities like cell and gene therapies is evidence, according to Mackay, that the industry’s “tailwinds” appear to be very strong.

Dead cells don’t cure cancer

A major early theme of the 2023 Meeting on the Mesa has been manufacturing and commercialization. Along these lines, while the panelists are all excited about the development of cell gene therapies and the enabling tools that go along with them, they’re keeping a close eye on companies involved in manufacturing and commercialization.

Kranjac agreed that bioproduction is exciting because there are going to be many such medicines. And those are exactly the types of companies, like RoosterBio, Curi Bio, and CellFE, that Dynamk has been adding to its portfolio.

“You can’t take your eyes off the ball on the manufacturing process and the tools that help with potency, stability, purity, and quality control—dead cells don’t cure cancer,” said Dixon. “When there are huge acquisitions with outsourced manufacturing and you start seeing the Thermo Fishers and Danahers making multi-billion-dollar acquisitions in the space to have capacity for cell gene therapies, that’s a wake-up call.”

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