Sector News

Oxford Biomedica strikes ‘transformational’ $90m deal with Novartis

October 10, 2014
Life sciences
An Oxford biotech company has landed a leading role in the quest to cure aggressive cancers using supercharged “killer” immune cells.
Oxford Biomedica has struck a deal worth up to $90m (£55m) with Novartis to develop and manufacture materials needed for a highly experimental cancer research programme at the Swiss drug giant.
Novartis is developing a form of cancer treatment that involves genetically re-programming the body’s “killer” immune cells, arming them with extra weaponry to wipe out tumours. The supercharged cells are known as chimeric antigen receptor T-cells, or CARTs. The Novartis programme is one of the most advanced of its kind and is a top priority for the Swiss drug maker.
Oxford Biomedica’s role is to develop and manufacture the so-called “viral lentivectors” that carry out the genetic modification at the heart of the process.
It first teamed up with Novartis last year in a £4m deal to manufacture viral lentivectors for the programme.
But Friday’s deal marks a much more significant tie-up between the two companies.
Under the terms of the new agreement, Novartis will pay $14m upfront, including $4.3m for a 2.8pc equity stake in Oxford Biomedica. It has also agreed to a series of royalty agreements at certain development milestones, bringing the total potential value of the deal to $90m.
In return, Oxford Biomedica will manufacture tailor-made viral lentivectors for Novartis for an initial three-year period, and the pair will work together to further develop the technology. Novartis will also get the exclusive rights to Oxford Biomedica’s CART-producing viral lentivectors.
John Dawson, Oxford Biomedica chief executive, told the Telegraph the deal was “transformational” for the company, which has operated at a loss since its founding in 1995.
“We hoped it would lead to this from the first deal, and had to work for a year to make sure we could do what we promised,” he said.
He added that, should all go to plan, the proceeds of the tie-up could make Oxford Biomedica cash flow positive by the end of 2016.
Oxford Biomedica has repeatedly tapped investors for fresh cash to fund its research programme into gene therapies for use in certain eye diseases, neurological conditions and cancers.
Until now, the company’s revenues from manufacturing and licensing agreements have been too small to offset the research spend. But Mr Dawson said the Novartis deal could bring the company “financial freedom”.
“If all goes to plan then the assumption is there will be no need to go back to the market again,” he said.
Mr Dawson said he expected Novartis to take the manufacture of viral lentivectors into its own hands eventually, but that Oxford Biomedica would still benefit from royalty payments since it owns the intellectual property for the process.

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