by Robert Kruse
Last week, Baxalta ($BXLT) made a significant partnership investment up to $1.4 billion in a small, private company, Precision BioSciences, located in North Carolina. With yet another significant deal in the news, I wanted to do a deeper dive into the goals and technology of this particular partnership, to see what the upside is from a suddenly new player in the CAR T cell space.
Precision BioSciences, founded in 2006, is formed around IP centered on designer homing endonucleases, that can be modified to bind to short stretch of DNA sequences of choice. Thus, Precision is a gene editing company, a term that has gotten a lot of buzz recently in the past couple years with the advent of CRISPR-Cas9 technology. Precision doesn't have major connections to the main immunotherapy academic players (yet), which is a difference between them and Juno, Kite, and Novartis. In many ways, Precision most resembles how Cellectis ($CLLS) entered into the immunotherapy world, which I will touch upon below.
To compare the respective DNA editing technologies, one can think of homing endonucleases as similar to the Cas9 protein, except there is no guide RNA and the DNA specificity is built into the protein. Thus, every endonuclease is novel and must be engineered from scratch. Current methods to mutate the wildtype protein for the designer sequence involve mutagenic arrays and screening. Thus, while the technology and concept has been around for a long time,
To contrast with Sangamo ($SGMO) and zinc finger technologies, the zinc finger has a more customizable format for designer DNA binding. However, the protein itself doesn't have any endonuclease activity, so another nuclease domain (FokI) must be fused to the zinc finger domain to create a chimeric protein. TALENs are very similar to zinc finger nucleases in their modular design and structure, having a more user friendly construction algorithm for the DNA binding portion.
Precision BioSciences' homing endonucleases are actually synonymous with meganucleases, which was the founding seed technology of Cellectis. It appears that the two companies have IP around different proteins in the same family, thus giving them both freedom to operate. This is only where the parallels begin between the companies. Baxalta and Precision are partnering on off the shelf CAR T cells, from healthy individuals, which is the same strategy that Cellectis is employing. It is likely that precision will try to edit the same or similar gene's to Cellectis (ie eliminating the TCR and HLA genes) in order to make its product off the shelf.
In many ways, it amounts to a classic "me-too" deal in biotech. Baxalta, soon to be merged with Shire, is buying similar technology from Precision BioSciences to compete with Pfizer, who bought the US rights from Cellectis for their lead genome engineered CD19 targeting CAR T cell product. Similarly, bluebird bio acquired Precision Genome Engineering for up to $140 million back in 2014 to use their megaTAL nuclease platform for cell engineering. The Baxalta deal also harkens back to the agreement between Juno Therapeutics ($JUNO) and Editas Medicine ($EDIT) for genome editing in their CAR T cell products with CRISPR (albeit Juno is still pressing the personalized strategy). All of this amounts to that the field in general seems to agree that genome editing is key for CAR T cell therapy. The ability to remove the built in brakes on the body's immune system to trigger even more potent damage against tumors. Time will tell which genome editing technology is best, but what's unique about the T cell space is that all are likely to work with similar endpoint efficacy, with the only differences being the efficiency in processing (ie 40% edited loci batch versus 80% edited loci batch). All these strategies use proteins that are foreign to the body, but the expression of these proteins will be gone by the time the T cells are infused in the body, so that point is moot. The amount of different proteins one is transfecting into the cells also likely doesn't give one strategy an advantage versus the other, since the mRNA is electroporated in at very high efficiencies.
In general, I see it as a smart deal for Baxalta, if they are truly interested in CAR T cells, and not just placing a chip in the field. The risk is if the Precision team can truly master the immunotherapy side to capitalize on it. While genome editing is a nice feature for enhancing T cell function or making third party T cells, the tumor targets still need to be optimized, and appropriate distinguishing IP generated. If you are a fan of the off-the-shelf T cell platform, you probably already like Cellectis and will like this deal. If you are skeptical of the strategy, you will probably think this is a faulty investment. Indeed, there are two camps emerging in the CAR T cell field, and it will be interesting if there emerges a clear victor over one or the other, or a compromise where different indications decide the appropriate strategy.
