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.

The Big Phar­ma dis­card pile; Lay­offs all around while some biotechs bid farewell; New Roche CEO as­sem­bles top team; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

With earnings seasons in full swing, we’ve listened in on all the calls so you don’t have to. But news is popping up from all corners, so make sure you check out our other updates, too.

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Trodelvy notch­es a win in most com­mon form of breast can­cer

Following a promise last year to go “big and fast in breast cancer,” Gilead has secured a win for Trodelvy in the most common form.

The drug was approved to treat HR-positive, HER2-negative breast cancer patients who’ve already received endocrine-based therapy and at least two other systemic therapies for metastatic cancer, Gilead announced on Friday.

Trodelvy won its first indication in metastatic triple-negative breast cancer back in 2020, and has since added urothelial cancer to the list. HR-positive HER2-negative breast cancer accounts for roughly 70% of new breast cancer cases worldwide per year, according to senior VP of oncology clinical development Bill Grossman, and many patients develop resistance to endocrine-based therapies or worsen on chemotherapy.

Sen. Ron Wyden (D-OR) (Francis Chung/E&E News/Politico via AP Images)

In­fla­tion re­bates in­com­ing: Wyden calls on CMS to move quick­ly as No­var­tis CEO pledges re­ver­sal

Senate Finance Chair Ron Wyden (D-OR) this week sent a letter to the head of the Centers for Medicare & Medicaid Services seeking an update on how and when new inflation-linked rebates will take effect for drugs that see major price spikes.

The newly signed Inflation Reduction Act requires manufacturers to pay a rebate to Medicare when they increase drug prices faster than the rate of inflation.

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David Kirn, 4D Molecular Therapeutics CEO (via website)

FDA places hold on 4D Mol­e­c­u­lar’s Fab­ry gene ther­a­py

4D Molecular Therapeutics quietly tucked an FDA clinical hold on its Fabry gene therapy into an SEC filing.

Meanwhile, the biotech issued a press release the same day after the closing bell on Thursday touting an IND for another asset, in diabetic macular edema.

The California biotech had paused enrollment of patients in its two trials of the Fabry gene therapy (4D-310) last month after three patients experienced kidney issues, all of which were resolved within four weeks. At the time, 4DMT said it would wait until the second half of this year to look at 12-month clinical data on six patients in the Phase I/II trials, one in the US and one in Taiwan and Australia.

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Raymond Stevens, Structure Therapeutics CEO

Be­hind Fri­day's $161M IPO: A star sci­en­tist, GPCR drug dis­cov­ery and a plan to chal­lenge phar­ma in di­a­betes

What does it take to pull off a $161 million biotech IPO these days?

In Structure Therapeutics’ case, it means having a star scientist co-founder paired with the computational drug discovery company Schrödinger, $198 million in private funding from blue-chip investors, almost six years of research work on G protein-coupled receptors and a slate of oral, small-molecule drugs, with an eye on the huge and growing diabetes and weight-loss market.

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Af­ter 13 years, Ramy Mah­moud steps in­to CEO seat at Opti­nose; Ru­pert Vessey set to ex­it Bris­tol My­ers in Ju­ly

After 13 years as president and COO at Optinose, Ramy Mahmoud has stepped into a new role as its CEO. He is taking the place of Peter Miller, who stepped down earlier this week, though Miller is still staying with the company as a consultant.

In 2010, the two business partners joined Optinose to take it in a new direction, transforming it from a delivery platform to product company. They previously worked together at Johnson & Johnson, when Miller was president at Janssen and Mahmoud headed medical affairs. Miller said after he learned about Optinose, “I did what I always do, which is find people smarter than me to talk with about the idea. And the first person I called was Ramy … and I said, ‘Hey, Ramy, what do you think of this technology?’”

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Ma­gen­ta halts stem cell work and may sell it­self fol­low­ing pa­tient death, clin­i­cal hold

Magenta Therapeutics said it is halting work on its stem cell transplant drug pipeline and may sell itself, a week after the company reported the death of a patient in an early stage trial of its antibody-drug conjugate.

The Cambridge, MA-based company said it will conduct a “review of strategic alternatives,” and that could include an “acquisition, merger, business combination, or other transaction.”

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Uğur Şahin, BioNTech CEO (Andreas Arnold/picture-alliance/dpa/AP Images)

BioN­Tech opens new plas­mid DNA man­u­fac­tur­ing fa­cil­i­ty in Ger­many

German mRNA player BioNTech opened the doors to a new manufacturing facility on Thursday, this one just about 75 miles north of its headquarters in Mainz, Germany.

BioNTech announced on Thursday that it has completed the construction of its first plasmid DNA manufacturing facility in Marburg, Germany. The facility will produce materials for mRNA-based vaccines and therapies along with cell therapies.

Te­va drops out of in­dus­try trade group PhRMA

Following in AbbVie’s footsteps, Teva confirmed on Friday that it’s dropping out of the industry trade group Pharmaceutical Research and Manufacturers of America (PhRMA).

Teva didn’t give a reason for its decision to leave, saying only in a statement to Endpoints News that it annually reviews “effectiveness and value of engagements, consultants and memberships to ensure our investments are properly seated.”

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