UPDATED: As Novartis looks to play catch-up in I/O, it ends cell and gene therapy unit

Novartis HQ cropped

Novartis plans to cut its internal unit dedicated to cell and gene therapy. It will redeploy most of those 400 employees but roughly 120 will be cut, according to reports from Forbes and Endpoints that the company confirmed. The unit was only two years old, a testament to how rapidly immunotherapies are developing--and how hard biopharmas need to work to keep up.

The move comes at an interesting time--just as Novartis has been emphasizing immuno-oncology as core to its overall oncology business strategy. The pharma has done more than a half-dozen deals to explore various immuno-oncology mechanisms of action, which it believes gives it one of the broadest I/O portfolios.

"The decision to re-integrate activities conducted by the Cell & Gene Therapies Unit into the larger Novartis organization is part of a natural evolution of our internal organizational design. An isolated Unit worked well under our prior Pharma Division structure, but with a new integrated development model, we can efficiently advance our work on CART as part of our focus in immuno-oncology by reintegrating the functions," a Novartis spokesperson told FierceBiotech via email. 

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I/O deal-making

Novartis is looking to pursue I/O combinations, but acknowledges that it may need to keep rethinking its approach. It has a dozen I/O portfolio candidates, with 26 clinical trials planned before year end, the company said.

These include novel checkpoint inhibitors, chimeric antigen receptor T-cell (CART) technology, myeloid cell targeting agents, the T-cell stimulating factor IL-15, STING agonists that enhance immune recognition of cancers, and adenosine receptor antagonists and TGF-beta blocking antibodies that overcome immunosuppression in the tumor microenvironment.

“We feel very confident in the PD-1 asset that we have early in NIBR. I’d also want to note that, we’ve conducted a number of pipeline deals to bring in-house really world-class assets from around the biotech community,” said Novartis Global Head of Drug Development and CMO Vasant Narasimhan on the company’s July earnings call.

He continued, “I think we’ve done that over 6 deals looking at various immuno-oncology mechanisms of action. And we believe we have one of the broadest portfolios in I-O. So, our view is to take a balanced approach, continue to bring expertise in-house that can evaluate external technology but also, determine--what’s the best path with our internal assets, particularly in combination with targeted therapies.”

Last month, Novartis did a major immuno-oncology bispecific antibody deal with Xencor that included a $150 million upfront and is worth up to $2.4 billion in milestones. The partners are slated to develop a pair of candidates, XmAb14045 for acute myeloid leukemia and XmAb13676 for B-cell malignancies, getting them both into the clinic this year. In addition, Novartis got worldwide rights to four additional targets from Xencor as well as a technology license for use in up to 10 molecules. The biopharma also did a sizable small molecule I/O deal with Aduro last year.

Antibodies and small molecules are seen as a more predictable means to hit immuno-oncology targets, given that they are established technologies that are being used in a new way. But other I/O means, such as cell-based therapies, gene therapy and vaccines are bringing to the I/O party relatively untested tech--that have variously been shown to still have efficacy, safety and production issues.

Cell-based therapeutics, in particular, have drawn skepticism in the wake of the deaths in the Juno CAR-T trials that were attributed to pretreatment preparation with a particular chemotherapy that proved a poor choice. The increasingly widespread concern is that engineered cells are highly unpredictable in how they interact with other drugs--making it tough to incorporate them routinely into what are becoming more elaborate, personalized I/O combination approaches.

In addition to Xencor and Aduro, Novartis has made I/O deals including the acquisition of CoStim Pharmaceuticals for its T cell checkpoint modulators, the acquisition of Admune Therapeutics for its Phase I IL-15 agonist for metastatic cancer, licensing deals with Palobiofarma and Xoma, as well as a preclinical partnership with Surface Oncology targeting T cell population regulation.

Staffing up in I/O

Another signal of Novartis’ dedication to immuno-oncology is its recent hire of a specialist, Dr. Jeffrey Engelman, in the field as Global Head of Oncology for its Novartis Institutes of BioMedical Research (NIBR). Starting in June, he was previously the Director of the Center for Thoracic Oncology and Molecular Therapeutics at Massachusetts General Hospital and a Harvard Medical School professor.

In an internal interview, Engelman described the recent history of oncology developments: he IDs tumor genotyping, targeted therapy resistance and immunotherapies as the key paths to advancement.

“When you look at the talent that we have assembled starting with Glenn Dranoff in immuno-oncology in the Novartis Institutes for BioMedical Research, and then you look at Jay Bradner, and you look at our recent hire of Jeff Engelman, this is a world-class team in terms of not just oncology, but immuno-oncology,” said Novartis CEO Joe Jimenez on a May investor conference call.

“We believe that while we did go outside to acquire and in-license a very broad range of second-generation I-O candidates, as well as the current checkpoint inhibitors that we’re developing, we’re developing them for a very specific reason,” he continued. “The winners in immuno-oncology long-term are going to win through combination therapies, and you better have a broad line of those combination therapies to capture the economics of what is going to become a capitation model in oncology going forward.”

Dranoff, a Dana-Farber Cancer Institute and Harvard Medical School oncologist, came in last spring to head the then-new Immuno-oncology research group at Novartis. The biopharma added Bradner, another Dana-Farber Cancer Institute and Harvard Medical School physician, as President of the NIBR last fall.

The biopharma’s lead cell therapy, CTL019 or tisagenlecleucel-T, which has a CD19-targeted chimeric antigen and is slated to treat pediatric acute lymphoblastic leukemia (ALL) in Phase II testing. It was developed under a University of Pennsylvania CAR-T deal that dates back to 2012. Novartis will continue its development, with a U.S. regulatory filing planned for early next year and an EU one later in 2017..

Novartis also lists two other early cell and gene therapy candidates: FCR001 to induce immunological tolerance and HSC835 for stem cell regeneration via intravenous transplantation.

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