Novartis-backed cell therapy startup Gamida files for IPO

Nasdaq
Novartis was set to buy Gamida for $170 million upfront in 2014. (Nasdaq)

Gamida Cell has filed to raise $69 million in a Nasdaq IPO. The Novartis-backed cell therapy player wants the money to wrap up a phase 3 trial of its lead candidate in patients with blood cancers.

Cell therapies, in the form of hematopoietic stem cell transplantations (HSCT), are already widely used in the treatment of blood cancers such as acute myeloid leukemia. However, the number of patients who receive HCST is limited by a lack of donor-matched cells. Haploidentical donors and umbilical cord blood partly make up for the shortfall in donor-matched cells, but Gamida still thinks 40% of patients eligible for HSCT never receive the treatment. 

Gamida wants to enable these patients to access cell therapy treatments. The biotech’s answer to the problem, NiCord, is made by applying a nicotinamide-based cell expansion technology to cord blood. Gamida thinks the result is an off-the-shelf treatment consisting of cells that quickly engraft and largely avoid attack by the host immune system.

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Israel-based Gamida is enrolling patients in a phase 3 trial to test the idea. With the trial not due to deliver top-line data until the first half of 2020 and Gamida’s cash reserves dipping below $30 million, the biotech is seeking up to $69 million from public investors to complete the study. 

Some of the money will go toward the build-out of a manufacturing plant in Israel. Manufacturing has posed challenges for the company. During a recent audit of Gamida’s contract manufacturer, Israeli inspectors made critical observations. Gamida is working with the manufacturer to fix the issues but is yet to get the all-clear from regulators.

Novartis was set to buy Gamida for $170 million upfront in 2014, but the deal fell through. Later that year, Novartis invested $35 million in Gamida and secured an option to buy the biotech outright in 2016. However, Novartis turned down the option 10 months later, well before it was due to expire.

The Swiss Big Pharma has continued to invest in Gamida, though. Novartis invested $5 million late in 2015—after turning down its option—and put a further $8 million into Gamida last year. The rounds left Novartis owning more than one-fifth of Gamida, making it the biotech’s biggest shareholder.    

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