Sleeping Beauty wakes up to $115m deal

CAR-T mania having swept the biotech sector, it was only a matter of time before the MD Anderson’s Sleeping Beauty transfer technology found a commercial partner, having stood out at the ASH conference as a clinical CAR-T asset that was still wholly in academic hands.

Last night the deal materialised, with MD Anderson securing $115m in equity from Ziopharm Oncology and Intrexon for exclusive rights. To those who have been following development closely, however, this is a clear case of corporate laggards betting on a technology that has failed to generate a great deal of excitement.

Not that this is of any consequence to bullish biotech investors, who in the current market seem to react positively to any announcement concerning CAR-T (chimaeric antigen receptor T cell) therapy. Ziopharm and Intrexon shares opened up 60% and 13% respectively this morning.

Of Ziopharm being a laggard there is little doubt. The group was hit hard by the scrapping of its lead project, Zymafos, in phase III last year; it then turned to a synthetic biology DNA programme licensed from Intrexon, of which the focus was Ad-RTS-IL12, a project to control IL-12 expression in melanoma and breast cancer.

Intrexon, a group whose technology it hopes will be applicable in the food, energy, environment and consumer sectors as well as healthcare, raised $160m in an IPO in August 2013.

ASH focus

MD Anderson’s Dr Partow Kebriaei had presented Sleeping Beauty CAR-T studies at the past two years' ASH conferences (ASH – Novartis, Juno, June and Rosenberg steal the T-cell show, December 9, 2014).

The crux of Sleeping Beauty is its non-viral gene transfer, using a transposon/transposase DNA plasmid-based system, rather than the lentiviral or retroviral transfection employed by leading CAR-T players including Novartis, Juno Therapeutics and Kite Pharma. The actual CAR expressed is of a standard second-generation type.

Last December Dr Kebriaei highlighted Sleeping Beauty’s safety, in particular the lack of cytokine release syndrome, and possible cost advantages, presenting data in various malignancies, either with or without transplant. Intriguingly she was using CAR-T cells derived either from the patient or the donor.

However, the relative safety of this approach could be due to it simply not being very efficacious, as well as the fact that in the post-transplant setting the tumour burden is low. Serious adverse events of cytokine release and neurotoxicity both correlate with disease burden and response.

Indeed, Dr Kebriaei’s data were underwhelming, showing complete remission rates of 80%, 46% and 36% in three leukaemia/lymphoma studies in various settings. And she broadly accepted the shortcomings, saying the CAR construct still had to be improved on, for instance by changing its co-stimulatory domain from CD28 to 4-1BB to improve T-cell persistence.

Inducement

None of this has stopped Ziopharm and Intrexon’s avid pursuit of the licence since December 19, as an SEC filing discloses. And, while the formal up-front equity payment is $100m, the companies each printed another $7.5m of stock for MD Anderson to induce the hospital to sign on the dotted line in time for this week’s JP Morgan meeting.

The companies aim to use Sleeping Beauty to take up to five CAR-T projects into the clinic this year. These are to use their Rheoswitch technology to control cell expansion and activation, hoping to minimise toxicity and maximise efficacy.

Ziopharm and Intrexon have also committed to funding the technologies to the tune of $15-20m a year over the next three years. They might have picked up an underwhelming asset, but the lesson of today’s market is to do a CAR-T deal – any deal, at any price – and your stock will surge.

To contact the writer of this story email Jacob Plieth in London at [email protected] or follow @JacobEPVantage on Twitter