SAN FRANCISCO – Following years of mutual admiration, Germany's Biontech SE is moving to acquire Cambridge, Mass.-based Neon Therapeutics Inc., a neoantigen-based T-cell therapy specialist, in an all-stock transaction valued at about $67 million. The deal values Neon's shares (NASDAQ:NTGN) at $2.18 each – far from their $16 per share IPO debut in June 2018. It brings both complementary modalities and an important U.S. presence to the European company, Biontech's chief business and commercial officer, Sean Marett, told BioWorld. It also adds two preclinical assets to Biontech's portfolio, NEO-PTC-01 and NEO-STC-01. Unanimously approved by both companies' boards, the acquisition is expected to close during the second quarter of 2020.
"This oncology immunology marketplace is all about speed, and speed is driven of course by infrastructure," Marett said. Biontech's acquisition of Neon will allow it to leverage not only its pre-existing infrastructure, but also add U.S.-based clinical development capabilities and complementary IP rights to the mix, he said.
NEO-PTC-01, Neon's most advanced program, is a personalized neoantigen-targeted T-cell therapy candidate. It is derived from patients' peripheral blood mononuclear cells. In December, the company sought permission from the Dutch Health Authority to start a phase I trial in the first half of 2020 evaluating the candidate in patients with metastatic melanoma refractory to checkpoint inhibitors. Development was expected to follow in metastatic ovarian cancer.
Neon is also advancing a precision T-cell therapy program targeting shared neoantigens in genetically defined patient populations. The lead candidate in that program is NEO-STC-01, an experimental T-cell therapy targeting shared RAS neoantigens. In addition, the company has assembled libraries of T-cell receptors (TCRs) against a variety of shared neoantigens across common human leukocyte antigens.
The heterogeneity of tumors means there's really no one-size-fits-all approach to immunotherapy in cancer, requiring an ongoing calibration of treatment to individuals, Marett said. "You may want to use T cells in certain circumstances and a vaccine in another. Or, for some patients, you might even put them together," he said. The research to determine which approach is best still lies ahead.
Biontech already has lab and office space in San Diego. But as far back as its IPO, its team had been signaling its intention to build a facility on the East Coast for further development of its clinical research capability, Marett said. "Here we have it, with like-minded people who understand our science." he said.
SVB Leerink analyst Daina Graybosch characterized the Neon acquisition as "cheap" for Biontech and aligned with the German company's scientific strengths. Overall, the purchase of Neon will be a positive, she said, as Biontech "expands and diversifies” their neoantigen and cell therapy approaches. "They will need to mitigate increased clinical-execution risk as they bring another program into their nascent clinical portfolio," she said.
Prior to the Jan. 16 proposed acquisition of the company by Biontech, Neon had financed itself by raising about $237.3 million across two venture rounds and its $90.3 million 2018 IPO. Third Rock Ventures led the company’s formation and series A round, with Partner Fund Management leading the series B financing.
Since its $16-per-share market debut, Neon has faced significant competition from a host of neoantigen vaccine players, not least among them Biontech itself. Other competitors Neon identified in its most recent annual report included Aduro Biotech Inc., Advaxis Inc., Agenus Inc., Genocea Biosciences Inc., Gritstone Oncology Inc., ISA Pharmaceuticals BV, Moderna Therapeutics Inc., Vaccibody AS and Ziopharm Oncology Inc.
On Thursday, Neon's shares closed at $1.70, having risen 38% on news of its acquisition. American depository shares of Biontech (NASDAQ:BNTX) fell $2.30 to close at $32.25 Jan. 16.