Two large U.S. drugmakers on Monday announced separate plans to invest tens of millions — for starters — in Philadelphia-based biotech start-ups.
Moderna, the upstart drugmaker that has grown rapidly through sales of its highly effective COVID-19 vaccine, has agreed to invest $80 million in Carisma Therapeutics, a Philadelphia-based firm that develops medical treatments based on macrophages, the “killer” white blood cells that fight disease.
That deal would allow Carisma to develop as many as a dozen new cancer treatments based on chimeric antigen receptor monocytes (CAR-M), engineered copies of disease-fighting cells, for Moderna. A pioneer in treatments based on messenger RNA — proteins whose genetic codes tell other cells what to do about disease — Moderna is based in Cambridge, Mass.
Privately held Carisma will add 20 to its West Philadelphia-based workforce of 60 to help make products for Moderna, Carisma CEO Steve Kelly said in an interview. The two deals represent “what Big Pharma and biotech companies have been doing together. It works out for us and for Philadelphia.”
In a separate deal Monday, shares of Philadelphia-based Century Therapeutics, which went public last year before it brought a product to market, rose about 15%, to $15.14, after Bristol Myers Squibb said it would invest $100 million in cash in the smaller company, and invest $50 million more in Century stock at $23.14 a share.
Working together, Bristol Myers Squibb and Century plan initially to develop as many as four “engineered natural killer cell” programs based on stem cells, targeting leukemia and solid tumors. Bristol Myers Squibb will also pay drug development costs for Century treatments that it licenses.
Bristol Myers Squibb estimated that it could end up paying Century more than $3 billion over time, if the treatments work as hoped. Plus, Century will collect a cut of about 10% in resulting sales.
Century went public last summer under chief executive Osvaldo “Lalo” Flores in an IPO that raised more than $240 million, two years after raising more than $250 million from private investments by German drugmaker Bayer, Fujifilm Cellular Dynamics Inc, Versant Ventures and others.
Even with the Bristol Myers jolt, Century’s price remained far below the stock’s peak closing last Aug. 9 at $31.93 a share, a reminder of how volatile valuations remain for experimental gene and cell therapy developers as share prices swing based on bits of news and investment trends.
The Moderna-Carisma collaboration will “expand the reach of Moderna’s technology,” applying Carisma’s cancer-fighting expertise to create new Moderna treatments in living cells, Moderna president and head of research Stephen Hoge said in a statement.
Moderna has developed systems using very small fat particles and messenger RNA to deliver cancer-fighting therapies. That will make it easier to mass-produce Carisma’s cancer-fighting treatments in a patient’s own body, Kelly said, reducing the potential cost and making the therapies more accessible. “It’s a complete extension for what we are able to do,” he added.
Moderna agreed to give Carisma $45 million in cash up front, plus $35 million in a debt note that could convert to shares of the smaller company. Carisma may receive additional payments as it brings products closer to market, plus royalties on profits from any actual sales.
Carisma will discover and prepare treatments while Moderna will run clinical development, marketing and sales. Moderna may select up to 12 Carisma treatments for the market.
Kelly noted that his company continues to work on other treatments, outside the Moderna deal. “We aren’t just focused on oncology, but also on liver fibrosis, and neurodegeneration,” he said. “This is a capital-intensive business.”
Carisma, whose scientific founders include Penn professors Michael Klichinsky and Saar Gill, has raised more than $100 million from investors since 2017. Its early backers include Boston-based AbbVie Ventures, plus a $5 million investment by the University of Pennsylvania’s biotech investment program, which also backed Carl Junes’ Tmunity and Steven Nichtberger’s Tycho Therapeutics.