Atara’s is the latest setback for a troubled field

Bayer dumps Atara, Precigen prepares for a fire sale and Tmunity struggles to find direction. Should investors still be excited about cell therapy?

Bayer scrapping its Car-T alliance with Atara yesterday, less than 18 months after the deal was signed, comes as the latest blow to a field that is having a hard time trying to make progress.

Other cell therapy companies whose projects have hit clinical setbacks include Tmunity and Celyad, while Precigen’s big focus now is how to avoid collapsing under a $201m convertible debt. Clearly, with early-stage groups struggling to innovate beyond the easy-win targets of CD19 and BCMA, the problem is not just that the five marketed Car-T therapies are posting mediocre sales.

Beyond the mundane

Atara and Tmunity are both examples of cell therapy-focused biotechs that had looked beyond the mundane.

The former’s lead Car-T project, ATA2271, uses Dr Michel Sadelain’s 1XX co-stimulatory domain and a PD-1 dominant negative receptor to eliminate T cells’ checkpoint signal. The latter is looking not only at novel targets, but also at new ways of “armouring” T cells, for instance via a dominant-negative TGF-β receptor in the lead asset, TmPCMA 01.

But now both are in trouble. ATA2271, which targets mesothelin, went on clinical hold in February after the death from a serious adverse event of a patient in its phase 1 mesothelioma study. Yesterday Bayer, which had bought into this project in December 2020 for $60m up front, ended the deal, citing “strategic review and asset-level prioritisation”.

The clinical hold has not been given as a reason, and it is true that Bayer had faced an unusual juggling act with its foray into cell and gene therapies. But work had progressed slowly: an allogeneic version of ATA2271, coded ATA3271, to which Bayer also had rights, has still not gone into the clinic.

Mesothelin is a target that has long disappointed – despite which several groups continue pursuing it. Mizuho analysts have already leapt to the defence of one of these, TCR2 Therapeutics, stressing that TCR2’s technology differs from Car-T.

Mesothelin-targeting projects in the clinic
Project Company Mechanism Clinical trial
Phase 2
Anetumab ravtansine Bayer/ Immunogen/ Morphosys MAb-drug conjugate NCT03926143
LMB-100 NCI (formerly studied by Selecta) Immunotoxin NCT04027946 (NCI study)
Phase 1/2
Gavo-cel TCR2 Therapeutics T-cell cell therapy NCT03907852
HPN536 Harpoon Therapeutics Trispecific T-cell engager NCT03872206
iCasp9M28z  Bellicum Car-T NCT02414269 (investigator-initiated)
Phase 1
ATA2271 Atara/ Bayer Car-T NCT04577326 (on hold)
BAY2287411 Bayer MAb-Th-227 conjugate NCT03507452
RC88 Remegen MAb-drug conjugate NCT04175847
RD133 Iaso Biotherapeutics Car-T NCT05166070
huCART-meso Tmunity Car-T NCT03054298
αPD1-MSLN-CAR Shanghai Cell Therapy Group Car-T (PD-1 nanobody secreting) NCT05373147
Unnamed Hrain Biotechnology Car-T NCT03814447
Unnamed Chinese PLA General Hospital Car-T (PD-1 knockout) NCT03545815
NIB103/ TAK-103 Takeda/ Noile-Immune Car-T NCT05164666
MCY-M11 Maxcyte Car-T NCT03608618 (terminated)
Source: clinicaltrials.gov.

Coincidentally, Tmunity is also working on mesothelin, via an expanded deal with the University of Pennsylvania. But it is not this that has given Tmunity a headache; rather, it is TmPCMA 01.

Last June a phase 1 study of TmPCMA 01 was reportedly halted after two patients died. This was never announced publicly by Tmunity, a venture capital-backed group, but at this year’s Asco-GU meeting the deaths were confirmed as being due to neurotoxicity and multi-organ failure, and a likely case of immune toxicity.

Then in February the group’s chief executive, Oz Azam, unexpectedly resigned. This came to light via Mr Azam’s Linkedin profile, and until recently Tmunity’s website still listed him as chief executive. It still lists TmPCMA 01 as its lead asset, and the phase 1 trial remains active on clinicaltrials.gov, but there have been no meaningful announcements from the company for over a year.

Cash crunch

Meanwhile, Precigen faces a different type of problem: a $201m convertible debt comes due for repayment in July 2023, but the group has just $142m in cash, and its market cap has fallen to $260m.

With little chance of an equity raise at the current valuation and in the current market Precigen has mooted selling off non-core assets to raise the necessary cash. Wells Fargo analysts suggest that Precigen’s lead Actobiotics asset, AG019 for type 1 diabetes, could be the first to go.

The company could also try to renegotiate the debt, but equity investors seldom come out well from such moves.

This story was updated to point out that Selecta is no longer involved in studying LMB-100.

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