- Novartis has signed an exclusive marketing agreement that tasks a West Coast biotech with supplying the big pharma's CAR-T therapy Kymriah in China.
- The biotech, Cellular Biomedicine Group, is clinical-stage and focuses on immuno-oncology and stem cell treatments. Though based in Cupertino, California, the company has production facilities in China that meet both U.S. and Chinese good manufacturing practices standards.
- Per a licensing deal announced Thursday, Novartis will make a $40 million equity investment in Cellular. At a rate of $27.43 per share, that gives Novartis about a 9% stake. The Swiss pharma also gets certain rights to some of Cellular's technology related to CAR-T therapies. Cellular, meanwhile, will receive a payment based on net product sales that starts in the single-digit percentages and rises thereafter.
Kymriah (tisagenlecleucel) was the first CAR-T therapy approved in the U.S., and has been OK'd in Europe. It also recently gained coverage in the U.K. as Novartis and the National Health Service struck a deal about its use in patients up to 25 years of age with B-cell precursor acute lymphoblastic leukemia that is refractory or in second or later relapse.
China, one of the world's largest pharmaceutical markets, is another frontier to break into.
But in spite Kymriah's advances, there are still plenty of hurdles.
Sales of the CAR-T therapy haven't yet impressed Wall Street, for instance. They totaled $16 million in the second quarter, far behind the $68 million Gilead Sciences reported over the same period for its rival product Yescarta (axicabtagene ciloleucel). Yescarta, though, won approval to treat diffuse large B-cell lymphoma, a more common blood cancer, sooner than Novartis did.
Manufacturing is particularly challenging for CAR-T therapies, and has been one of the main headaches with Kymriah. Thursday's agreement with Cellular seems to illustrate Novartis' determination to address those problems — particularly in another market.
"Together with Novartis, we hope to bring the first CAR-T cell therapy to patients in China. In addition, we continue to focus on developing [Cellular's] pipeline of immuno-oncology assets," Cellular CEO Tony Liu said in a Sept. 27 statement.
The Swiss pharma has also recently partnered with a French CDMO to expand its production capabilities in Europe.
In other deal terms, Cellular will receive a mark-up from Novartis on the costs of manufacturing Kymriah. Cellular will be in charge of manufacturing, while Novartis helms distribution, regulatory efforts and commercialization in China.