Dive Brief:
- Cancer cell therapy developer Adaptimmune Therapeutics is acquiring TCR2 Therapeutics in an all-stock deal, bringing together two struggling companies that have recently laid off staff. The combined company will have enough cash to fund operations until 2026.
- Under the deal terms announced Monday, TCR2 shareholders will receive about 1.5 U.S.-listed Adaptimmune shares for each TCR2 share. After closing, Adaptimmune shareholders will own 75% of the combined company, which will continue to trade under the Adaptimmune ticker. TCR2 board members will have three seats on the nine-member board of directors.
- Both companies are developing treatments that reengineer immune cells to fight cancer, attempting to build on the success of therapies like Novartis’ Kymriah and Gilead’s Yescarta. Adaptimmune aims to soon seek approval of its first product, a treatment for a rare type of soft tissue cancer, and expects to finish filing an application with the Food and Drug Administration in the middle of the year.
Dive Insight:
The deal highlights the funding difficulties that development-stage biotechnology companies continue to face amid a sector-wide downturn that has weakened investor interest. This has led to a spate of layoffs and consolidation across the industry.
Before the companies’ respective layoffs — in November for Adaptimmune and in January for TCR2 — they both had expected to run out of money next year without striking any licensing deals or stock sales.
If all goes to plan, by the end of 2024 the combined company should have an FDA decision in synovial sarcoma for the lead Adaptimmune product, called afami-cel, as well as late-stage data for a second product, called ADP-A2M4CD8. Mid-stage study data for a TCR2 product called gavo-cel could be available by the end of next year as well.
“The combination of our two companies not only sets the stage for near-term execution but also positions the new company for the longer-term,” TCR2 CEO Garry Menzel said in a statement.
Executives said the two companies have complementary technologies for turning T cells into potent cancer-fighting weapons, particularly for solid tumors that haven’t yet been addressed by cell therapies. Kymriah and therapies like it treat cancers of the blood and lymphatic system.
But, as with those therapies, the process for manufacturing Adaptimmune’s and TCR2’s products involves drawing blood from patients and isolating T cells to be engineered to kill tumor cells, and then re-infusing the cells back into patients. It’s a lengthy and costly process, but can deliver durable remissions when it works.
Other cell therapy companies have focused on “off-the-shelf” treatments that use donor cells, but progress in testing has been mixed. Meanwhile, another class of cancer drugs known as bispecific antibodies has advanced rapidly.
Adaptimmune’s shares fell 26% in morning trading, while TCR2’s were up by a third.