Celyad: Novartis Says Yes To Allogeneic Technology
Edison | May 05, 2017 05:54AM ET
Novartis (NYSE:NVS) has taken a non-exclusive licence to Celyad (NASDAQ:CYAD) granted allogeneic US patent for $96m (an upfront fee, we assume $12m, and milestones) plus single-digit royalties. Novartis, a leading player in the haematological CAR T-cell cancer area, presumably aims to expand out of the limited autologous ALL indication where it has a filed BLA. The $96m deal sends a clear signal to other CAR T-cell companies to license quickly or risk being locked out of any allogeneic mass market until 2031. Celyad already has an allogeneic deal with ONO in Japan and Asia. Our indicative value has moved to €52.25 per share, formerly €45.
Novartis and allogeneic therapies
On 29 March 2017 Novartis announced the FDA acceptance of a priority review on its biological licence application (BLA) for CTL019 (tisagenlecleucel-T), an autologous CAR T-cell therapy for B-cell acute lymphoblastic leukaemia (ALL). This indication has a limited US market, including adults, of 5,970 new cases and 1,440 deaths per year (SEER). Broadening the use of CAR T-cell therapy and cutting costs by producing an ‘off the shelf’ allogeneic format is presumably commercially crucial for Novartis. Celyad has a US patent (US 9181527) granted until 2030 on allogeneic therapy to prevent graft versus host disease from transplanted CAR T-cells. This patent has survived two recent challenges; further worldwide patents are filed. Novartis presumably either needs to use this technology or would infringe the broad claim 1 of this patent; consequently, a non-exclusive deal (with an exclusive option) has been done. This complements the ONO deal in Japan and Asia done by Celyad in 2016 (see note from 13 July 2016). Celyad plans NKR-2 allogeneic trials in 2017. The current THINK NKR-2 CAR T-cell trial in two haematological and five solid tumours is at its second dose level with a US arm underway.
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