Arie Bellde­grun rais­es $300M, grabs Pfiz­er’s al­lo­gene­ic CAR-T port­fo­lio and launch­es a ground­break­ing dri­ve to com­mer­cial­iza­tion

Af­ter pi­o­neer­ing one of the first per­son­al­ized CAR-T ther­a­pies to be ap­proved by the FDA, Kite vets Arie Bellde­grun and re­search chief David Chang have now launched a new biotech with a whop­ping $300 mil­lion in cash fi­nanc­ing and a col­lab­o­ra­tion with Cel­lec­tis af­ter bag­ging the full port­fo­lio of off-the-shelf CAR-T drugs in de­vel­op­ment at Pfiz­er.

Bellde­grun — who came away with a for­tune of more than $600 mil­lion from the sale of the biotech to Gilead — tells me he gained swift back­ing from a broad syn­di­cate to cre­ate Al­lo­gene Ther­a­peu­tics. And they’re jump­ing out of stage left with a deal that gives them con­trol of Pfiz­er’s CAR-T port­fo­lio, which in­cludes rights to the ear­ly-stage UCART19 al­lied with Paris-backed Cel­lec­tis.

In ex­change, Pfiz­er is get­ting a 25% stake in Al­lo­gene, which im­me­di­ate­ly vaults from out of nowhere in­to a lead­ing po­si­tion among de­vel­op­ers of off-the-shelf CAR-T ther­a­pies, look­ing to leapfrog the first gen­er­a­tion of per­son­al­ized CAR-Ts that use reengi­neered pa­tient cells.

“We have every one of the in­ter­est­ing tar­gets that I’m aware of,” says Bellde­grun, the new­ly mint­ed ex­ec­u­tive chair­man at Al­lo­gene, with Chang tak­ing the CEO job. And they’re ready to get to work with Cel­lec­tis, Servi­er and every­one else en­gaged in the “Man­hat­tan project” of bring­ing the first al­lo­gene­ic CAR-T to mar­ket.

“This is the biggest project,” Bellde­grun says. “This is where cel­lu­lar ther­a­py will find its way.”

David Chang

Bellde­grun and Chang told me in a pre­view of the an­nounce­ment Mon­day evening that the deal be­gan to come to­geth­er the night they were cel­e­brat­ing the close of the Kite sale, when one of the bankers in­volved told them about a po­ten­tial deal he knew of.

In­stead of a leisure­ly va­ca­tion break, what fol­lowed was 5 months of in­tense ne­go­ti­a­tions, in which Bellde­grun got a close, up­front look at the 16 tar­gets that a team of 70 Pfiz­er in­ves­ti­ga­tors have been work­ing on for the past 4 years, along with UCART19, the 17th pro­gram in the deal.

“I looked at the da­ta and said ‘David, we need to do this, it’s a gold mine.’ It’s a deal I couldn’t refuse,” says Bellde­grun. “We know it’s the fu­ture.”

In­stead of a lengthy and ex­pen­sive per­son­al­ized au­tol­o­gous ap­proach that re­quires the ex­trac­tion and reengi­neer­ing of pa­tient cells in­to a po­tent ther­a­py that has proved par­tic­u­lar­ly ef­fec­tive in blood can­cers, Bellde­grun will now look to per­fect a gene edit­ing process that can de­vel­op 50 to 100 ther­a­peu­tic batch­es from a sin­gle donor. If it works, it will be cheap­er and faster than the first CAR-Ts, Yescar­ta and Kym­ri­ah.

This was a deal that in­volved “mul­ti­ple” bid­ders, says Bellde­grun, will­ing to pay a sig­nif­i­cant amount to buy in. But he says he and Chang were able to put to­geth­er the win­ning of­fer by keep­ing Pfiz­er close­ly en­gaged in the start­up and a clin­i­cal dri­ve that could get them to the thresh­old of com­mer­cial­iza­tion in just a few years.

With back­ers deeply im­pressed by their $12 bil­lion sale of Kite to Gilead, Bellde­grun and Chang are work­ing with in­vest­ments from TPG, Vi­da Ven­tures, Bell­Co Cap­i­tal, the Uni­ver­si­ty of Cal­i­for­nia Of­fice of the Chief In­vest­ment Of­fi­cer and Pfiz­er.

The pair of en­tre­pre­neurs are get­ting a team of about 50 Pfiz­er in­ves­ti­ga­tors to trans­fer over in the deal, tak­ing over Pfiz­er space for now in South San Fran­cis­co as they scout their own new digs. And Bellde­grun says they have al­ready lined up a string of “top notch” play­ers to join the com­pa­ny. 

You can ex­pect the pay­roll to dou­ble in the next year, he adds.

An­dré Chouli­ka

The deal teams Bellde­grun and Chang with Cel­lec­tis CEO An­dré Chouli­ka, the French biotech ex­ec who’s been steer­ing the first off-the-shelf CAR-T in­to hu­man stud­ies. Servi­er and Pfiz­er launched a land­mark tri­al of Cel­lec­tis’ UCART19 for acute lym­phoblas­tic leukemia, get­ting the green light to ex­pand from the UK in­to US sites a year ago.

I ran in­to Chouli­ka at an an­a­lysts meet­ing Bellde­grun or­ga­nized for Kite in New York a cou­ple of years ago. It struck me as odd see­ing the al­lo­gene­ic leader at the ri­val au­tol­o­gous gath­er­ing, but Chouli­ka tells me it was part of a long re­la­tion­ship that has con­verged in­to this new deal.

“Arie and my­self have been talk­ing for a long time,” Chouli­ka told me. The mu­tu­al re­spect they de­vel­oped, he says, com­bined with Kite’s ster­ling rep for ex­e­cu­tion, helped bring it all to­geth­er.

“I was con­vinced that Kite would be the win­ner in the au­tol­o­gous space,” says Chouli­ka. And he thinks the new team at Al­lo­gene, com­bined with Cel­lec­tis’ know-how on gene edit­ing, will ac­cel­er­ate the work on their lead ther­a­py, with a shot at com­mer­cial­iza­tion work in late 2021 or ’22.

The tech­nol­o­gy may be still ap­pear to be quite ear­ly, but Bellde­grun paints a pic­ture of glob­al in­vestors ea­ger to get in now. 

The $300 mil­lion came to­geth­er in a mat­ter of weeks, says Bellde­grun, who adds that it would have been easy to raise twice that amount. For now, he’s not short of cash — and he says he and Chang al­so put their own mon­ey in­to the deal. As they go for­ward, con­sid­er­ing the need to build their own ded­i­cat­ed man­u­fac­tur­ing, he ex­pects they’ll be able to raise more cash as need­ed.

So why not take the mon­ey from the Kite deal and take an ex­tend­ed va­ca­tion?

“I think at the end it’s not mon­ey that dri­ves what we do,” says Chang, who was cleared to leave Kite in Feb­ru­ary af­ter stay­ing on for the tran­si­tion. “It’s re­al­ly the ac­tiv­i­ty that will sat­is­fy you, or some­thing that’s deep down in you.”

A New Fron­tier: The In­ner Ear

What happens when a successful biotech venture capitalist is unexpectedly diagnosed with a chronic, life-disrupting vertigo disorder? Innovation in neurotology.

That venture capitalist was Jay Lichter, Ph.D., and after learning there was no FDA-approved drug treatment for his condition, Ménière’s disease, he decided to create a company to bring drug development to neurotology. Otonomy was founded in 2008 and is dedicated to finding new drug treatments for the hugely underserved community living with balance and hearing disorders. Helping patients like Jay has been the driving force behind Otonomy, a company heading into a transformative 2020 with three clinical trial readouts: Phase 3 in Ménière’s disease, Phase 2 in tinnitus, and Phase 1/2 in hearing loss. These catalysts, together with others in the field, highlight the emerging opportunity in neurotology.
Otonomy is leading the way in neurotology
Neurotology, or the treatment of inner ear neurological disorders, is a large and untapped market for drug developers: one in eight individuals in the U.S. have moderate-to-severe hearing loss, tinnitus or vertigo disorders such as Ménière’s disease.1 With no FDA-approved drug treatments available for these conditions, the burden on patients—including social anxiety, lower quality of life, reduced work productivity, and higher rates of depression—can be significant.2, 3, 4

Joe Jimenez, Getty

Ex-No­var­tis CEO Joe Jimenez is tak­ing an­oth­er crack at open­ing a new chap­ter in his ca­reer — and that in­cludes a new board seat and a $250M start­up

Joe Jimenez is back.

The ex-CEO of Novartis has taken a board seat on Century Therapeutics, the Versant and Bayer-backed startup focused on coming up with a brand new twist on cell therapies for cancer — a field where Jimenez made his mark backing the first personalized CAR-T approved for use.

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Can we make the an­tibi­ot­ic mar­ket great again?

The standard for-profit model in drug development is straightforward. Spend millions, even billions, to develop a medicine from scratch. The return on investment (and ideally a tidy profit) comes via volume and/or price, depending on the disease. But the string of big pharma exits and slew of biotech bankruptcies indicate that the model is sorely flawed when it comes to antibiotics.

The industry players contributing to the arsenal of antimicrobials are fast dwindling, and the pipeline for new antibiotics is embarrassingly sparse, the WHO has warned. Drugmakers are enticed by greener pastures, compared to the long, arduous and expensive path to antibiotic approval that offers little financial gain as treatments are typically priced cheaply, and often lose potency over time as microbes grow resistant to them.

Top Har­vard chemist caught up in FBI’s 'T­hou­sand Tal­ents' drag­net, ac­cused of ly­ing about Chi­nese con­nec­tions, pay

The FBI’s probe into the alleged theft of R&D secrets by Chinese authorities has drawn Harvard’s top chemist into its net.

The agency accused Charles M. Lieber, who chairs the university’s chemistry and chemical biology department, with lying about his involvement in China’s Thousand Talents campaign, which was established as a way of drawing in innovators from around the world. And the scientist, 60, was charged with making false statements about his ties to China.

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Eye­ing a trio of tri­al ini­ti­a­tions, Jim Wilson's gene ther­a­py start­up woos Bruce Gold­smith from Deer­field as CEO

Passage Bio — Jim Wilson’s self-described “legacy company” — has wooed a seasoned biotech executive to steer the clinical entry of its first three gene therapy programs.

Bruce Goldsmith jumps to the helm of Passage after a brief CEO stint at Civetta, a cancer-focused startup he helped launch while a venture partner at Deerfield. He takes over from OrbiMed partner and interim chief Stephen Squinto, who will now lead the R&D team.

The FTC and New York state ac­cuse Mar­tin Shkre­li of run­ning a drug mo­nop­oly. They plan to squash it — and per­ma­nent­ly ex­ile him

Pharma bro Martin Shkreli was jailed, publicly pilloried and forced to confront some lawmakers in Washington riled by his move to take an old generic and move the price from $17.50 per pill to $750. But through 4 years of controversy and public revulsion, his company never backed away from the price — left uncontrolled by a laissez faire federal policy on a drug’s cost.

Now the FTC and the state of New York plan to pry his fingers off the drug once and for all and open it up to some cheap competition. And their lawsuit is asking that Shkreli — with several years left on his prison sentence — be banned permanently from the pharma industry.

UP­DAT­ED: Ac­celeron res­ur­rects block­buster hopes for so­tater­cept with pos­i­tive PhII — and shares rock­et up

Acceleron $XLRN says that its first major trial readout of 2020 is a success.

In a Phase II study of 106 patients with pulmonary arterial hypertension (PAH), Acceleron’s experimental drug sotatercept hit its primary endpoint: a significant reduction in pulmonary vascular resistance. The drug also met three different secondary endpoints, including the 6-minute walking test.

“We’re thrilled to report such positive topline results from the PULSAR trial,” Acceleron CEO Habib Dable said in a statement. The company said in a conference call they plan on discussing a Phase III trial design with regulators.

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Short at­tack­er Sahm Ad­ran­gi draws crosshairs over a fa­vorite of Sanofi’s new CEO — with PhII da­ta loom­ing

Sahm Adrang Kerrisdale

Kerrisdale chief Sahm Adrangi took a lengthy break from his series of biotech short attacks after his chief analyst in the field pulled up stakes and went solo. But he’s making a return to drug development this morning, drawing crosshairs over a company that’s one of new Sanofi CEO Paul Hudson’s favorite collaborators.

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Amber Saltzman (Ohana)

Flag­ship's first ven­ture of 2020 is out, and it's all about sperm

A couple years ago, Amber Salzman got a call as she was returning East full-time after a two-year stint running a gene therapy company in California.

It was from someone at Flagship Pioneering, the deep-pocketed biotech venture firm. They had a new company with a new way of thinking about sperm. It had been incubating for over a year, and now they wanted her to run it.

“It exactly fit,” Salzman told Endpoints News. “I just thought I had to do something.”