Adaptimmune was facing a financing cliff until Galapagos walked in with a sprawling licensing deal for a next-generation T-cell therapy that could total $665 million in biobucks.
The multipronged deal, announced after market close Thursday, involves uza-cel, a MAGE-A4 TCR T-cell therapy Adaptimmune is developing for ovarian cancer. Galapagos, however, wants to take the therapy into head and neck cancer and potentially additional solid tumors down the line.
To do so, the Belgian biotech is offering $100 million upfront, split between a $70 million upfront payment and $30 million in R&D funding, plus option exercise fees worth up to $100 million, milestone payments of up to $465 million, and eventual royalties on net sales, according to a Thursday press release.
Mizuho analysts heralded the deal as a last-minute savior for Adaptimmune.
“Overall, we view the deal as a major positive, as most importantly in our view, not only does it remove a near-term financing overhang, but it also secures the necessary funding to ensure a proper launch of lead asset afami-cel in synovial sarcoma (SS), which we expect later this year,” Mizuho’s Graig Suvannavejh, Ph.D., wrote in a Friday morning note.
Investors also cheered the deal, sending Adaptimmune’s shares up 21% in premarket trading Friday morning to $1.23 compared to $1.01 at close Thursday.
Galapagos will gain the right to develop the cell therapy in head and neck cancer while Adaptimmune proceeds in ovarian cancer through the phase 2/3 SURPASS-3 trial. Adaptimmune has already tested uza-cel in ovarian, bladder, and head and neck cancers during the phase 1 SURPASS trial, which CEO Adrian Rawcliffe said “demonstrated compelling early results.”
Just five patients have been treated in head and neck cancer so far, but there were four confirmed partial responses.
Galapagos intends to use its decentralized manufacturing platform in an effort to improve efficacy and durability with early phenotype T-cells. The technology allows about a seven day turnaround time, according to Mizuho. Adaptimmune has been using a centrally manufactured approach from its platform up until now.
“Combining uza-cel with Galapagos’ unique decentralized manufacturing platform is a natural synergy and has the potential to deliver an even more effective TCR T-cell therapy for people with critical late-stage cancers,” Rawcliffe said.
Adaptimmune was in need of a deal like this after Roche’s Genentech walked away from a partnership worth a potential $3 billion in April. The 2021 collaboration involved two types of allogeneic T-cell therapies: off-the-shelf therapies directed to up to five targets and personalized therapies.
The company is awaiting an FDA decision for afami-cel as well, which has been submitted for advanced synovial sarcoma and has an action date of Aug. 4.
While that FDA date is being keenly awaited by investors, Mizuho was “pleasantly surprised” to see the Galapagos deal. The firm has only considered uza-cel’s application in ovarian cancer but has predicted peak sales of $787 million in the indication.