The Friday Biotech Perspective #15
BioNTech and Autolus find each other on the dance floor
Long before BioNTech (NASDAQ:BNTX) seemingly swelled overnight as a Covid-19 vaccine company, BioNTech had a 10-year track record focused on cancer. By the time it listed in late 2019, BioNTech had advanced five platforms of cancer therapeutics and vaccines centered on messenger RNA (mRNA) technology.
Like Moderna (NASDAQ:MRNA), another mRNA platform company, BioNTech quickly saw the need and opportunity in Covid-19 and pivoted with Pfizer (NYSE:PFE) to deliver a Covid-19 vaccine in late 2020 (as did Moderna). Profits mushroomed at all three companies.
BioNTech, however, never abandoned its cancer drugs. Rather, the cancer programs understandably were dialed to simmer on the back burner of the pipeline. Now that Covid-19, and the Covid-19 vaccine market, appear to have flattened BioNTech is resuming its focus on cancer, evidenced by its $250 million investment this week in Autolus Therapeutics plc (NASDAQ:AUTL).
On the surface, the deal raises eyebrows. BioNTech and Autolus are developing cancer treatments for some overlapping indications. Autolus, which traded as high as $48 per share after it listed in 2018, saw its stock price fall to less than $2 per share in 2023 after a string of clinical trial setbacks. In contrast, the success of the Covid-19 vaccine boosted BioNTech’s shares nearly 10-fold in 2021. BioNTech still boasts a $22 billion market cap now, compared to Autolus’ $1 billion.
Yet in its new post-Covid phase, BioNTech chose a practical deal to obtain access to the UK manufacturing and clinical trial network run by Autolus. BioNTech relied heavily on Pfizer to run clinical trials and to manufacture the Covid-19 vaccine. Germany-based BioNTech is advancing a chimeric antigen receptor (CAR) T cell manufacturing facility in the US but the company still needs more capacity. And space for engineering ingenuity. BioNTech’s most advanced CAR-T cancer drug, BNT211, appeared to take a leap forward last year because of the company’s new manufacturing process. But BioNTech wants to move forward 10 or more potentially registrational clinical trials in cancer by year’s end. The US expansion can’t proceed fast enough.
Enter Autolus. CAR T cells are autologous, re-engineered T cells; the re-engineering and new manufacturing takes place after the original T cells are collected from cancer patients. Several CAR T-cell therapies are approved to treat rare forms of blood cancer. Each has achieved success in treating patients, with certain limitations. BioNTech and Autolus are advancing second- and third-generation CAR-T cancer programs designed to be more precise and more durable.
Autolus’ most advanced autologous CAR-T, named obe-cel, could be approved by the FDA in November 2024. Obe-cel would treat patients with B-cell acute lymphoblastic leukemia.
In exchange for BioNTech providing a $50 million upfront payment and buying $200 million of Autolus’ stock in a private placement, BioNTech will gain up to mid-single digit royalties on obe-cel sales. More important, BioNTech owns the option to access Autolus’ UK commercial and clinical site network and manufacturing capacities to accelerate the development of BNT211.
BioNTech also gains an exclusive license to develop and commercialize therapeutics incorporating certain of Autolus’ proprietary binders along with options to license binders and cell programming technology for use in BioNTech’s in vivo cell therapy development programs and investigational antibody-drug conjugates. If BioNTech exercises an option, Autolus could receive exercise fees and milestones payments, plus low-single digit royalties.
Most biopharma alliances, typically between big companies and small companies, end up with the smaller company swallowing its pride and taking on undesirable, dilutive terms. Or a big company overpaying for a technology because it does not want to miss out on an emerging market. Moreover, smaller companies usually gain a big payout and then (eventually) wind down when a drug like obe-cel is close to the market. This did not happen for Autolus, in the BioNTech deal.
With the cash from BioNTech in hand, Autolus immediately turned to public investors and requested more money via an anticipated $350 million public offering. Autolus expects to use the funds to advance its clinical programs and early-stage pipeline.
BioNTech said the deal is a “collaboration aimed at advancing both companies’ autologous CAR-T programs towards commercialization,” should regulatory approvals be granted.
A potential win-win-win for patients-BioNTech-and-Autolus. Not that common in biopharma.
SanaCurrents, the parent of Biotech Currents, initiated a long position in BioNTech in January 2020. It previously owned positions in Autolus.