Alex Karnal (Deerfield)

Deer­field vaults to the top of cell and gene ther­a­py CD­MO game with $1.1B fa­cil­i­ty at Philadel­phi­a's newest bio­phar­ma hub

Back at the be­gin­ning of 2015, Deer­field Man­age­ment co-led a $10 mil­lion Se­ries C for a pri­vate gene ther­a­py start­up, re­shap­ing the com­pa­ny and bring­ing in new lead­ers to pave way for an IPO just a year lat­er.

Fast for­ward four more years and the start­up, AveX­is, is now a sub­sidiary of No­var­tis mar­ket­ing the sec­ond-ever gene ther­a­py to be ap­proved in the US.

For its part, Deer­field has al­so grown more com­fort­able and am­bi­tious about the nascent field. And the in­vest­ment firm is now putting down its biggest bet yet: a $1.1 bil­lion con­tract de­vel­op­ment and man­u­fac­tur­ing fa­cil­i­ty to pro­duce every­thing one needs for cell and gene ther­a­py — faster and bet­ter than how it’s cur­rent­ly done.

“What we saw dif­fer­ent­ly here is not just the ob­vi­ous — that there’s such a out­sized lev­el of de­mand for the amount of sup­ply — but we al­so saw the need to cre­ate an en­tire ecosys­tem” for gene ther­a­py play­ers, Alex Kar­nal, part­ner and man­ag­ing di­rec­tor at Deer­field, told End­points News. “This is the first time they’re gonna have a place where they can call home.”

Just how big is the de­mand? Days ago John Chimin­s­ki, who’s lead­ing Catal­ent in bulk­ing up its own gene ther­a­py unit, told an End­points au­di­ence that the num­ber of projects in the pipeline is ex­pect­ed to surge from 300 to­day to 1,100 by 2026 — trans­lat­ing to a vol­ume of 2.5 mil­lion to 4 mil­lion liters of vi­ral vec­tors need­ed. That’s up from 300,000 liters now.

Tony Khoury

Deer­field is build­ing its new Cen­ter for Break­through Med­i­cines at a for­mer Glax­o­SmithK­line cam­pus at King of Prus­sia, PA, now run by The Dis­cov­ery Labs. Span­ning 680,000 square feet, the site will con­sist of some­where be­tween 75 to 100 suites spread around 26 in­ter­con­nect­ed build­ings.

Start­ing from an old lab space with much of the equip­ment still in­tact means the cen­ter can hit the ground run­ning, with the site ex­pect­ed to be par­tial­ly func­tion­al by the end of this year and ful­ly up and run­ning in 2021. And do­ing so on the out­skirts of Philadel­phia — where some of the ear­li­est work in cell and gene ther­a­py were done by pi­o­neers such as Carl June and Jim Wil­son — on a sprawl­ing 1.6 mil­lion square feet com­plex de­signed to oth­er biotech star­tups should make it ap­peal­ing to the 2,000 sci­en­tists, man­u­fac­tur­ing ex­perts, tech­ni­cians and sup­port staff Deer­field plans to re­cruit.

With Tony Khoury, a key con­sul­tant for AveX­is, on board as a di­rec­tor and Paragon Bio founder Mar­co Chacón as chair at the Dis­cov­ery Labs, Kar­nal feels con­fi­dent about cast­ing a wide net and train­ing a whole co­hort of cell and gene ther­a­py spe­cial­ists on site. In fact, Deer­field has seen con­sid­er­able in­ter­est in the 24 hours they’ve an­nounced the project.

Which is good, be­cause the King of Prus­sia site is on­ly step 1. Deer­field is plot­ting three more across the US.

Mar­co Chacón

It’s not just about ex­pand­ing ca­pac­i­ty or even hav­ing the first end-to-end pro­duc­tion fa­cil­i­ty. Ac­cord­ing to Kar­nal, they will in­vest in op­ti­miz­ing the process of pro­duc­ing vi­ral vec­tors — from the most com­mon AAV to lentivirus — to both ad­dress the po­ten­cy and yield.

“The tragedy in the mar­ket­place is that the pu­rifi­ca­tion process­es are still in their in­fan­cy; we’re on­ly get­ting yields that are 10 to 20% on av­er­age from a good run,” he said. “You start with 10 to the X virus­es but then af­ter you pu­ri­fy it you lose 70 to 80% of that batch, that’s just — that’s like liq­uid gold be­ing wast­ed.”

The hope is to dou­ble the cur­rent num­bers.

Most of the ini­tial set­up will be geared to­wards gene ther­a­py — one out of 26 build­ings will be re­served for cell ther­a­py — but Kar­nal said they can keep it flex­i­ble for cus­tomers’ needs, re­gard­less of com­pa­ny lo­ca­tion, tar­get tis­sues, or de­liv­ery meth­ods. Each suite can pro­duce around 8 to 12 batch­es every year, and com­pa­nies will have the op­tion to take one whole build­ing for them­selves. The to­tal num­ber of cus­tomers will de­pend on all those vari­ables.

“Gen­er­al­ly speak­ing a batch is pret­ty con­sis­tent­ly priced, what’s not con­sis­tent is how many pa­tients you can serve,” he said.

A num­ber of oth­er com­pa­nies, both drug­mak­ers and con­trac­tors, are rush­ing to serve the same, ever-ex­pand­ing pa­tient pool. No­var­tis and Pfiz­er have com­mit­ted $500 mil­lion and $600 mil­lion on their own pro­duc­tion ca­pa­bil­i­ties, re­spec­tive­ly, and then there’s the CD­MOs like Catal­ent and Ther­mo Fish­er, which have grown their gene ther­a­py teams through bil­lion-dol­lar ac­qui­si­tions of Paragon and Bram­mer Bio. Biotechs big and small are jump­ing in­to the game; Pitts­burgh-based Krys­tal Biotech has just bro­ken ground on a sec­ond com­mer­cial fa­cil­i­ty in Find­ley Town­ship near Ohio.

“We want all the play­ers in the mar­ket­place to make it and be wild­ly suc­cess­ful be­cause the re­al­i­ty of it is even with us and every­body that ex­ists to­day, the de­mand far ex­ceeds the sup­ply still,” Kar­nal said.

In­side Track: Be­hind the Scenes of a Ma­jor Biotech SPAC

Dr. David Hung and Michelle Doig are no strangers to the SPAC phenomenon. As Founder and CEO of Nuvation Bio, a biotech company tackling some of the greatest unmet needs in oncology, Dr. Hung recently took the company public in one of this year’s biggest SPAC related deals. And as Partner at Omega Funds, Doig not only led and syndicated Nuvation Bio’s Series A, but is now also President of the newly formed, Omega-sponsored, Omega Alpha SPAC (Nasdaq: OMEG; oversubscribed $138m IPO priced January 6, 2021).

Janet Woodcock, acting FDA commissioner (Al Drago/Bloomberg via Getty Images)

New Alzheimer's drug ap­proval fall­out: Pub­lic Cit­i­zen seeks re­moval of FDA's Wood­cock, Cavaz­zoni and Dunn

As Capitol Hill begins to wake up to the financial and scientific mess behind the FDA’s approval of Biogen’s new controversial Alzheimer’s drug Aduhelm, nonprofit watchdog Public Citizen is now calling for the top three FDA officials who are responsible to be removed from their positions.

In a letter to HHS Secretary Xavier Becerra on Wednesday, the group highlighted the “litany of flaws” in the FDA’s approval of the new drug, including the “unprecedented, inappropriately close” collaboration between the FDA and Biogen in the analysis of key trial data, basing approval on an unvalidated surrogate endpoint, not following the advice of its expert advisory committee (3 members of which have since resigned), and the wide label that the agency granted.

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Aus­tralian spin­out eyes the clin­ic with a pro­phy­lac­tic nasal spray for Covid-19

Whether patients are immunocompromised or just don’t like needles, one fledgling Australian biotech says it has an alternative to Covid-19 vaccines that doesn’t involve a jab in the arm — and on Tuesday, it pulled in a fresh round of funding to take it into the clinic.

ENA Respiratory, which spun out of ENA Therapeutics last year, has pulled in nearly $24.7 million (AU $30 million) to advance its nasal spray for respiratory viral infections, the company said Tuesday.

Someit Sidhu, JATT

An­oth­er life sci­ences SPAC has popped up from a small biotech CEO with the help of Take­da, No­var­tis vet­er­ans

Editor’s note: Interested in following biopharma’s fast-paced IPO market? You can bookmark our IPO Tracker here.

The SPAC train has slowed down since the extraordinarily high levels from late 2020 into early this year, but Tuesday saw the filing of a new blank-check company targeting the life sciences industry.

Jatt Acquisition submitted its SEC paperwork Tuesday, penciling in an estimated raise of $120 million as it sets its sights on a reverse merger partner. The SPAC is run by Someit Sidhu, a co-founder of Pathios Therapeutics, as well as CEO of Akaza Bioscience and Izana Bioscience. Sidhu will control about 97% of the blank-check company’s shares, per the S-1.

In a first, Re­gen­eron's an­ti­body cock­tail re­duces deaths for a sub­group of hos­pi­tal­ized Covid-19 pa­tients

Scientists have come up with the first evidence that Regeneron’s antibody cocktail, which has so far only been authorized for the outpatient setting, may reduce deaths of hospitalized Covid-19 patients — albeit only a subset.

The combination of casirivimab and imdevimab is the subject of the latest data cut from RECOVERY, the large-scale UK-based trial testing a variety of potential treatments. In total, 9,785 patients hospitalized with Covid-19 were enrolled in this arm of the study and were randomly assigned to receive either usual care plus the intravenous combo or usual care alone.

Michel Sade­lain puts his name and new cell en­gi­neer­ing tech be­hind 'ag­nos­tic' CAR-T start­up chas­ing epi­ge­net­ic anti­gens

It felt natural for Alain Maiore and Sebastian Amigorena to bring in Michel Sadelain as a co-founder of Mnemo Therapeutics. A CAR-T pioneer, Sadelain had been involved as an advisor since the early days — enthusiastic about Amigorena’s work in a genetic knockout that could enhance T cell memory and a new class of potential targets he’s discovered — and could introduce some well-known technologies to the toolbox. So they got the initial cash from Sofinnova Partners to plant roots in Paris and New York in early 2019; within a few months, they began to see more clearly just what the antigen discovery platform might unlock.

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Barry Greene, Sage CEO

UP­DAT­ED: Sage's sec­ond chance at de­pres­sion hits the PhI­II pri­ma­ry, but ques­tions re­main over dura­bil­i­ty, side ef­fects

Looking to make a comeback after a big Phase III flop, Sage Therapeutics revealed data they believe could change the entire depression treatment landscape, given the vast array of failures in the field. But some results are spooking investors, sending Sage $SAGE shares down early Tuesday.

First, the primary: Sage and Biogen reported Phase III data for once-daily zuranolone Tuesday morning, saying the experimental drug hit its primary endpoint by spurring a statistically significant change from baseline in the 17-item Hamilton Rating Scale for Depression total score. After 15 days, patients in the drug arm saw an average change of -14.1 points, compared to -12.3 on placebo.

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Bio­gen sig­nals a big PhI­II fail­ure as the lead gene ther­a­py in their $800M Night­star buy­out goes down in flames

That $800 million buyout of Nightstar has turned into a bust for Biogen as the lead therapy in the deal failed a pivotal study, signaling a severe setback for the biotech’s ambitions in gene therapies.

The big biotech put out the word after the market closed on Monday that the gene therapy they picked up in the deal for a degenerative blindness called choroideremia failed the Phase III study, just a month after their #2 drug in the deal also flopped in a mid-stage study.

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CEO Harith Rajagopalan (Fractyl)

Af­ter a decade in the type 2 di­a­betes game, Fractyl Lab­o­ra­to­ries recharges with a fresh $100M and a new name

Harith Rajagopalan compared the way type 2 diabetes is managed to sticking your fingers in a dam that’s leaking from a number of places.

You can take drugs to lower your blood sugar, cholesterol, or blood pressure, but you’re not addressing what he says is the core issue — the metabolic abnormality that causes the disease.

“We’re so busy plugging the holes in the dam, we don’t have time to see that the whole infrastructure is at risk,” he said. “That infrastructure is a full-body systemic metabolic abnormality called metabolic syndrome, that we’re ignoring while we’re so busy trying to treat all of the individual symptoms of the condition.”