Kiadis makes nothing into €325m

Sanofi goes all in on Kiadis's natural killer cell projects, gained through an all-stock deal in 2019.

Deals

Sometimes reinventions work out. Kiadis, whose future looked in doubt after it scrapped its lead project a year ago, has managed to tempt Sanofi into a €308m ($358m) buyout – based on technology it acquired for nothing from Cytosen a year and a half ago.

The move by Sanofi comes just four months after the French company licensed one of Kiadis’s Cytosen-derived natural killer cell projects for €17.5m up front. Sanofi has tried before buying, and has obviously seen enough to go all in.

There could also be an element of avoiding future milestone payments: Sanofi was in line to shell out €857.5m if all went well with the asset in question, K-NK004. Now the group has Kiadis’s entire NK cell therapy pipeline for a lot less than it might have had to pay for only one project.

Sole bidder

Still, with Kiadis’s chief executive, Arthur Lahr, disclosing during a call today that the company had not had any interest from other potential acquirers or partners, there might be questions about why Sanofi paid such a large premium – 247% over Kiadis’s 30-day average trading price.

Some investors might also ask if Sanofi could have got a better bargain if it had cut out the middle man and bought Cytosen itself.

Mr Lahr insisted today that Kiadis had added value since taking out Cytosen in April 2019, “with the filing of several INDs, manufacturing and process improvements, and the filing of more than a dozen patents”.

In any case, the deal price is relatively small change for Sanofi, which has already made a couple of multibillion-dollar acquisitions this year as it tries to rebrand as an oncology and rare disease player under its new chief executive, Paul Hudson.

Cell therapy first

Purchasing Kiadis is the first major investment Sanofi has made in cell therapy. But the jury is still out on whether Sanofi wants to become a cell therapy player in the traditional sense of the word.

The main motivation behind licensing K-NK004 in July was to gain an asset that could improve the potency of Sanofi’s anti-CD38 MAb Sarclisa, recently launched for multiple myeloma (A swift big pharma endorsement for Kiadis, July 8, 2020).

As CD38 is also present on some NK cells, treatment with an anti-CD38 MAb thus risks inadvertently also wiping out a patient’s NK cells, which are involved in their immune response. K-NK004 is an NK cell product in which CD38 has been knocked out to make such cells resistant to CD38 blockade and prevent “fratricide”.

Since that deal, “Sanofi started to recognise the much broader potential of our platform”, according to Mr Lahr. As well as K-NK004, which is still preclinical, Sanofi will take on three clinical-stage projects incorporating unmodified, off-the-shelf NK cells.

Kiadis's pipeline
Project Indication Status
K-NK002 Preventing relapse post-stem cell transplantation in blood cancers Phase II, NCT04395092
K-NK003 Relapsed/refractory AML Phase I
KNK-ID-101 Pre/postexposure Covid-19 prophylaxis Phase I
K-NK004 Multiple myeloma in combo with Sarclisa Preclinical
Source: Company website, clinicaltrials.gov.

However, only one, K-NK003, is being developed as a cancer therapy in its own right. Kiadis’s lead asset, K-NK002, is designed to prevent relapse in patients with blood cancers undergoing stem cell transplantation, alongside post-transplant standard of care, cyclophosphamide. Intriguingly, the third project, KNK-ID-101, is being developed for Covid-19.

Mr Lahr concluded that Sanofi was the “perfect fit” for Kiadis, being “the only pharma that has products serving oncology, transplant and infectious disease: exactly our focus areas”.

Diverging fortunes

Today marks quite the turnaround for Kiadis, which until last year was one of three companies focused on stem cell transplant adjuncts, alongside Molmed and Bellicum. However, these therapies either disappointed commercially or never made it to market (Kiadis falls, and Bellicum could be next, October 18, 2019).

Thanks to Cytosen, Kiadis has pivoted successfully, and Molmed also managed to sell itself this year, to AGC Biologics.

However, Bellicum looks like it has reached the end of the road: last week it slashed its workforce and focused on the Car-T projects BPX-601 and BPX-603. In a cruel twist, Bellicum said at the time that it had halted its NK programme, BCMA GoCar-NK.

Bellicum might be out of the NK cell therapy race, but there are various other players still in the running; Sanofi is now one of them.  

Selected NK cell therapy players
Company Description Genetically modified? Valuation
Kiadis Universal donor-derived NK cells No €308m purchase by Sanofi
Fate Therapeutics iPSC-derived NK cells Most, Car-modified plus high-affinity CD16 $3.86bn market cap
Nkarta Donor-derived NK cells Car-modified   $938m market cap
Nantkwest NK-92 cell line-derived NK cells Car-modified plus high-affinity CD16 $811m market cap
Gamida Cell Donor-derived NK cells No $251m market cap
Takeda/MD Anderson Cord blood-derived Car-modified   N/A
Bellicum  Donor-derived NK cells Car-modified, rimiducid-activated, rapamycin/ temsirolimus-ablated Project discontinued
Source: EvaluatePharma, company presentations.

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