AZ makes another cell therapy play with $1.2bn Gracell buy

AZ makes another cell therapy play with $1.2bn Gracell buy

AstraZeneca has lined up a $1.2 billion takeover deal for Chinese biotech Gracell Biotechnologies, bolting a series of cell therapies for cancer and autoimmune diseases onto its pipeline.

The agreement is the latest in a series of acquisitions and licensing deals aimed at bolstering AZ’s position in cell therapy, an area where it has lagged behind other companies like Novartis, Bristol-Myers Squibb, and Gilead Sciences, and also continues a string of agreements it has signed with Chinese companies.

If consummated, the deal will add a BCMA and CD19-targeted CAR-T therapy for blood cancers including relapsed and refractory multiple myeloma, for which it is in a phase 1b/2 trial in the US. The drug – called GC012F – also has FDA clearance for a phase 1/2 trial in the autoimmune disorder systemic lupus erythematosus (SLE).

Buying Gracell will also give AZ ownership of the biotech’s FasTCAR cell therapy manufacturing platform, TruUCAR technology for making off-the-shelf (allogeneic) CAR-Ts, and SMART CART technology for CAR-Ts that can target solid tumours.

Under the terms announced today, AZ will pay $2 per share for Gracell, with a contingent value right (CVR) of $0.30 per share owing if GC012F meets a regulatory milestone. That equates to around $1 billion upfront and a total value of $1.2 billion if the CVR is achieved. AZ said it expects to close the transaction in the first quarter of 2024.

In a statement, AZ’s head of oncology R&D, Susan Galbraith, said the acquisition will “complement AstraZeneca’s existing capabilities and previous investments in cell therapy, where we have established our presence in CAR-T and T-cell receptor therapies (TCR-Ts) in solid tumours.”

That includes a $2 billion partnership signed in the summer with Quell Therapeutics, and a multibillion-dollar, wide-ranging alliance with Cellectis to apply its gene-editing platform and manufacturing capabilities to the design of cell and gene therapy (CGT) products that was agreed in November, and a CAR-T alliance with AbelZeta earlier this month.

Last year, the pharma group also acquired TCR specialist Neogene Therapeutics for up to $320 million, whilst also working on its own pipeline of CAR-Ts for solid tumours. Those are currently headed by C-CAR031, a GPC3-targeting therapy that has started clinical testing in liver cancer, and STEAP2-directed AZD0754, which is still in early-stage development as a potential prostate cancer therapy.

Along with GC012F, Gracell’s pipeline includes a dual-targeting CAR-T for acute myelogenous leukaemia (AML), a CD19/CD7 therapy for B-cell acute lymphoblastic leukaemia (B-ALL), and BCMA/CD7 therapy for multiple myeloma, and an early-stage Claudin 18.2-directed therapy for solid tumours.

William Cao, Gracell’s chief executive, said it was looking forward to working with AZ “to accelerate our shared goal of bringing transformative cell therapies to more patients living with debilitating diseases.”

Gracell US shares – listed on the Nasdaq – were up more than 60% at the time of writing.