Despite a rethink that saw Cellectis drop its multiple myeloma CAR-T only five months ago, AstraZeneca wants in. The Big Pharma is handing over more than $100 million in upfront cash and equity investment for a 10-candidate deal.
The collaboration will use Cellectis’ gene editing tech and manufacturing capacity to develop up to 10 cell and gene therapy products, drawn from among 25 genetic targets that will be exclusively reserved by AstraZeneca. In addition to $25 million in upfront cash, the pharma will make an initial $80 million equity investment in New York-based Cellectis, with a memorandum of understanding relating to a further $140 million investment down the line.
The off-the-shelf cell therapy specialist will also be eligible to receive an investigational new drug option fee on top of development, regulatory and sales-related milestone payments that will range from $70 million up to $220 million for each of the candidates. Should any make it to market, the biotech will receive a share of the royalties.
The near-term funding boost will come in useful for a company that was riding on just $89 million at the end of June, a financial runway that the biotech had expected to last into the third quarter of 2023. Cellectis said it would use today’s proceeds “to develop gene editing tools, for research and development expenses incurred in developing its programs, and other general corporate purposes.”
The $80 million equity investment will be spent on 16 million ordinary shares, giving AstraZeneca a 22% stake in the biotech, along with 21% of the voting rights. It suggests that the Big Pharma sees potential in the company—a view strengthened by the significant markup it's paying on those shares.
At $5 a pop, AstraZeneca is paying considerably above the 97 cents that Cellectis’ shares were trading at by market close yesterday. However, the stock has since jumped up to $2.62 in premarket trading this morning in the wake of the news.
The memorandum of understanding on the additional $140 million investment down the line will cover two newly created classes of convertible preferred shares of Cellectis, although both will be at the same price of $5 apiece. Should that go ahead, AstraZeneca would end up with a sizable 44% stake in the company, along with 30% of voting rights and the ability to nominate two directors to the biotech’s board.
“The differentiated capabilities Cellectis has in gene editing and manufacturing complement our in-house expertise and investments made in the past year,” AstraZeneca’s chief strategy officer Marc Dunoyer explained in the release.
It’s a welcome show of faith in Cellectis, which decided to give up on its multiple myeloma CAR-T candidate UCARTCS1 in May. With a phase 1 clinical trial two years behind schedule and heavy investment needed to accelerate enrollment, the biotech said at the time that it would halt the study and focus resources on three other clinical-stage candidates: UCART22, UCART123 and UCART20x22.