BioNTech (BNTX) recently announced that it had acquired Neon Therapeutics (NTGN) for $67 million in an all-stock deal. The acquisition of this biotech was a wise one, because personalized antigens (neoantigens) can potentially become a more profound way of treating cancer patients. Besides the acquisition of Neon, BioNTech had already established 3 or more big partnership deals with well-known pharmaceutical companies. The company already has translational science with its approach of combining messenger RNA (mRNA) together with cell therapies like T-cell receptors (TCRs) or Chimeric antigen receptors (CAR-Ts) to improve efficacy in solid tumors.
A Solid Acquisition That Could Greatly Shake Up The Immunotherapy Space
I believe that BioNTech got a good deal when it acquired Neon Therapeutics for only paying $67 million. Why did the company feel the need to acquire it? I believe the main thinking process of the company boils down to the ability to transform the immunotherapy space towards a more personalized approach. Other than that, it was likely also because of the potential to improve clinical outcomes for programs like CAR-T. There are multiple reasons for why I believe BioNTech acquired Neon. The first reason starts off with what I highlighted above, in that CAR-T therapies have limitations in treating solid tumors. The problem with CAR-T is they are engineered to target tumor associated antigens (TAAs). They are developed to go after specific antigens on the surface of cancer cells. That’s where the potential of Neon’s neoantigens comes in. Neoantigens provide a more personalized approach to cancer treatment, because they are antigens not yet discovered by the immune system. That is, each patient’s tumor has its own specific type of antigen to be targeted (neoantigen). A neoantigen is a specific molecule or protein that the immune system will target and kill. Once a patient’s blood is collected, the specific tumor antigen on the cancer cell, unique only to that specific patient, is identified. T-cells are then modified to target this specific tumor neoantigen. This will likely improve upon efficacy of the treatment against this type of cancer. With these neoantigens not being found on healthy cells at all, that is another advantage to have. This means an improved tumor specificity profile exists with the use of neoantigens. The use of Neon Therapeutics’ neoantigen products holds so much potential to improve clinical outcomes for patients in the cancer immunotherapy space. The main thing to note is that the addition of neoantigens from Neon Therapeutics expands BioNTech’s cell therapy pipeline.
Solid Foundation To Begin With
The addition of neoantigens into the pipeline is a good thing, because it adds another type of cell therapy technology. The thing is that BioNTech was already working on a groundbreaking program of its own. As I highlighted above, CAR-T has not been utilized to its best ability to treat solid tumors. That has to do with CAR-T not being able to have a long-lasting effect (durable response) against solid tumors and sometimes not that great for hematological malignancies (blood cancer) either. In addition, there hasn’t been a clear-cut way to expand T-cell activity against solid tumors with CAR-T. There are two ways that BioNTech is planning on doing this and more.
The first thing it is doing is specifically targeting an oncofetal antigen Claudin 6 (CLDN6) for patients with solid tumors. This protein is a tumor specific antigen (TSA) to help possibly increase the targeting of solid tumors using BNT-211. Such an oncofetal antigen is found in fetal development (embryogenesis or the placenta), however, it is also expressed in adults with certain types of cancer. This specificity offers a way to target multiple solid tumors, without affecting healthy cells (CLDN6 is not found in healthy cells at all, avoiding toxicity issues). That’s because CLDN6 is expressed in many solid tumors like: ovarian, testicular, uterine and lung cancer.
The second thing it is doing to improve outcomes in solid tumors, with the use of CAR-T, is to apply its RNA vaccine known as CARVac. The whole goal for CARVac is to accomplish what other CAR-Ts lack, which is the ability to drive better immunogenicity against solid tumors (act as a primer to boost efficacy) by two important features. In preclinical studies, CARVac was able to amplify and allow persistence of CAR-T cells against cancer. This means that not only can it expand upon the CARs available to be deployed against the targeting of cancer cells, but there is a chance that this type of combination with the targeting CLDN6 can possibly create a more durable response for patients. If this happens in human studies, that will be a major breakthrough. It will prove that the combination of BionNTech’s BNT-211 (which targets CLDN6) in combination with an RNA Vaccine (CARVac) can in fact improve efficacy of CAR-Ts. BNT-211 is going to be initiated in a phase 1/2 study treating patients with multiple types of solid tumors. This study is expected to begin soon in the first half of 2020.
The financials of BioNTech are very solid. First thing to note is that it completed an IPO on October 9, 2019. It sold 10 million American depositary shares (ADS) at $15 per ADS, raising roughly $150 million. This was less than what the company was hoping for on its debut. Still, with the amount it obtained it was valued at $3.39 billion. Before that, in July, it was able to raise $325 million in a private financing round. A clear financial picture will be noted once the company updates its financial position in the coming months.
Risks To Business
First and foremost, Neon Therapeutics is early in the process of clinical development for its neoantigens. There is no guarantee that eventually mid-stage and late-stage studies will end up being successful for those products. Still, I believe that BioNTech can make use of the neoantigen platform technology, which utilizes RECON Bioinformatics engine to select appropriate neoantigen targets, peptide chemistry development, NEO-STIM for T-cell biology processing. There will be a use for this type of technology one way or another. The second risk to go over involves several competitors in the space. Neon Therapeutics isn’t the only biotech that is working on developing cancer treatments with the use of neoantigens. Other biotechs that have neoantigen products include Advaxis (ADXS), Gritstone Oncology (GRTS), Genocea Biosciences (GNCA) and Moderna, Inc. (MRNA). Speaking of Moderna, it also has a product targeting mutations of tumor cells by leveraging its mRNA product, like BioNTech. Moderna had already partnered with Merck (MRK) for mRNA-4157 back in June of 2016. However, the partnership was expanded upon in 2018. The goal of the partnership is to advance this product in combination with Merck’s Keytruda. The combination is being explored in the KEYNOTE-603 study, treating patients with unresectable solid tumors.
BioNTech had made a great acquisition that will be complementary with its cell therapy pipeline. The addition of Neon Therapeutics brings in two personalized neoantigen-targeted T cell therapies named NEO-PTC-01 and NEO-STC-01. NEO-PTC-01 is expected to be explored in a phase 1 study treating patients with 2nd line metastatic melanoma. Specifically, those patients who had failed with prior checkpoint inhibitor therapy. I believe the main argument to be made is that the synergy comes from the fact both companies are evaluating cell therapies as a personalized or targeted approach. NEO-STC-01 is slightly different, in that it involves shared neoantigens. Shared neoantigens meaning that the antigen is not unique to one specific patient, but shared across multiple patients. The NEO-STC-01 product targets RAS pancreatic cancer and is in the preclinical stage of testing. The goal is to eventually expand to other RAS expressing solid tumors. The RAS target is a good one to go after first, because several members of this gene family include HRAS, KRAS, and NRAS. On the flip side, it’s a tougher type of cancer mutation to treat. That’s because the RAS mutation has a protein that is always activated (always on). In other words, this mutation tells the cancer cells that it is okay to keep multiplying without any pushback, going beyond limits involved with typical cell growth. BioNTech has a deep pipeline and it is a good speculative biotech to buy. One last thing to note is that it has already established 8 collaboration deals already. A few of them include:
- Co-development and co-commercialization of novel mRNA-based, individualized cancer vaccines with BNT122 program – partnership established with Genentech 2016
- Co-development and co-commercialization of bispecific antibodies BNT-311 and BNT-312 – partnership established with Genmab (GMAB) in 2015
- Development and commercialization agreement of up to 5 intratumoral mRNA cancer immunotherapies like BNT-131 – partnership established with Sanofi (SNY) in 2015
These are just a few of the names that BioNTech has partnered with already. Several other pharma players include Pfizer (PFE), Eli Lilly (LLY) and Genevant. I believe the diverse pipeline that BioNTech has is what will likely give it long-term value in the coming years.
This article is published by Terry Chrisomalis, who runs the Biotech Analysis Central pharmaceutical service on Seeking Alpha Marketplace. If you like what you read here and would like to subscribe to, I’m currently offering a two-week free trial period for subscribers to take advantage of. My service offers a deep-dive analysis of many pharmaceutical companies. The Biotech Analysis Central SA marketplace is $49 per month, but those who sign up for the yearly plan will be able to take advantage of a 33.50% discount price of $399 per year.
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