Last month, Touchstone Innovations – the commercialisation firm spun out of Imperial College London – participated in a £60m ($73m) series C round launched by Cell Medica, a cellular immunotherapy developer that Touchstone co-founded in 2007.
A $73m series C round may not be record-breaking, but in the spinout world, where sums tend to be significantly lower on average, that is a notable sum. And there is no question that immunotherapy, a treatment that harnesses the body’s own immune system to fight cancer, is big business – pharma companies Bristol Myers-Squibb and US-based Merck lead the pack for now, as both have two successful treatments on the market that rake in hundreds of millions of dollars – the former’s Opdivo and the latter’s Keytruda.
While many immunotherapy developers start by focusing on a single cancer indication, Cell Medica is more ambitious. The company will use its series C capital to commercialise not one but three technology platforms. Touchstone, which has taken part in every Cell Medica transaction to date, contributed £13.7m to the round, while Invesco Perpetual and Woodford Investment Management, through respective unspecified funds, also committed cash.
Immunotherapy, in essence, modifies a patient’s immune system to give it the ability to recognise and attack malignant cells. Cell Medica takes a two-pronged approach to this – the company both manufactures naturally occurring and gene-modified products. The company’s lead oncology candidate, Baltaleucel-T, is currently undergoing a phase 2 clinical trial for patients with advanced lymphomas associated with the Epstein Barr virus, one of the eight herpes viruses and the cause of glandular fever, though it is also associated with several kinds of cancer, such as Hodgkin’s lymphoma, and conditions associated with HIV.
The immunotherapy producer has signed collaboration agreements with University College London and Baylor College of Medicine to commercialise additional product candidates. Cell Medica is using technology known as Streptamer, a selection technique that labels or isolates antigen-specific T-cells – a natural part of the immune system that forms one of the pillars of several immunotherapies.
The technology is licensed from Juno Therapeutics, a joint venture involving Fred Hutchinson Cancer Research Centre, Seattle Children’s Rese arch Institute and Memorial Sloan-Kettering Cancer Centre, which made countless headlines on Global University Venturing after a huge $120m series A round in 2013 that eventually closed at $176m in mid-2014 on the way to an IPO in late 2014 that priced its stock at $24 a share. By December 2015 the price had more than doubled to $54 a share.
The good news kept on coming until last year, when Juno hit a wall and five patients died in clinical trials. Development of that particular drug candidate was halted earlier this month. At the time of writing, Juno Therapeutics was trading at about $20.69.
To be sure, immunotherapy’s lure can be treacherous. When Bristol Myers-Squibb decided to widen the potential usage of Opdivo last year, it launched a clinical trial that ultimately failed and wiped $21bn off of the company’s market value in August. That has not deterred early-stage businesses, however. In the past year alone, spinouts from institutions as varied as Albert Einstein College of Medicine, Pittsburgh University, Rockefeller University and University Medical Centre Utrecht have raised capital to develop their own take on immunotherapy.
The fact that Cell Medica is collaborating with Touchstone, once a darling of the university venturing world, is promising. What is more, with the series C money going towards the commercialisation of three technology platforms, Cell Medica is making sure it is not putting all its eggs in one basket. The company has also proven it does not particularly need jaw-dropping amounts, as its £50m series B round raised in 2014 lasted several years. That round was led by Touchstone, then known as Imperial Innovations, with participation from Invesco and Woodford.
Touchstone previously led a £17m series A round in 2012, while Invesco Perpetual and Cancer Prevention and Research Institute of Texas also took part. Wellcome Trust converted a previous loan into equity at the same time. In 2007, Touchstone supplied an undisclosed amount of seed funding.
Gregg Sando, co-founder and chief executive of Cell Medica, said of the latest funding round: “With the strong support of our key shareholders, Cell Medica will implement the next phase of our development program, bringing a new generation of cell-based immunotherapy products into phase 1 clinical trials as well as completing our phase 2 program for Baltaleucel-T. This funding enables us to continue our efforts to unlock the full potential of cellular immunotherapy for the benefit of cancer patients.”