DUBLIN Biontech AG raised $270 million in a series A round that further adds to the sense of excitement and momentum building up around one of the global biotech industry's key innovators in immuno-oncology.
The Mainz, Germany-based company is growing in both scale and complexity and has multiple activities that are heavy consumers of cash. "We're 700 people now," Chief Operating Officer Sean Marett told BioWorld. "We've really been growing extremely rapidly, and we continue to be on that track going forward."
The company is building out its investor base by bringing in U.S. institutional investors that will enable it, in time, to tap into Wall Street. San Francisco-based Redmile Group led the round. Other participants included London-based Janus Henderson Investors, New York-based Invus Group LLC, Boston-based Fidelity Management & Research Co. and several European family offices, including the Strüngmann family, the company's initial backer.
A Nasdaq IPO is not in the cards at this point, however. "It won't be this year, I can say that," Marett said. "It would be too early for us to do that." Going public at this point would represent too much of a distraction for management, given the effort needed to engage with investors. "We will try to stay private for as long as possible because we want to focus on delivery of our clinical programs," he said.
The new cash takes Biontech's total equity investment to about $450 million and the total cash it has received to date to about $950 million. The deep-pocketed Strüngmann brothers pumped about $180 million into the company in 2008. Up-front and early milestone payments from its alliances added another $450 million, and the rest has come in research grants. The Strüngmanns already had a relationship with Biontech founder and CEO Ugur Sahin through his previous venture, Ganymed Pharmaceuticals AG, which Astellas Pharma Inc. acquired in 2016 for up to $1.4 billion, $461 million of which came up front. (See BioWorld Today, Oct. 31, 2016.)
The vision for Biontech was long term from the outset. "It was clear from him that he didn't want some classical VC investors who'd want to flip the company after a couple of years," Biontech Chairman Helmut Jeggle, who manages the Strüngmanns' life sciences investments, told BioWorld. The effort to add new investors began a year ago, at the J.P. Morgan conference in San Francisco. "We were not looking for crossover investors we were looking for believers," Jeggle said.
A major priority for the company this year is to further develop its single-batch manufacturing capabilities, which are key to the delivery of individualized cancer therapies based on each patient's unique profile of cancer neoantigens. With the help of Munich-based Siemens AG, it has recently upgraded its original manufacturing facility, at Idar-Oberstein, from a manual to a semiautomated process, which required a regulatory good manufacturing practice (GMP) re-inspection and approval. It is also in the process of obtaining GMP status for a second production unit, located at its main R&D facility in Mainz.
The company is not divulging its key production parameters the turnaround time for just-in-time delivery of individualized therapies and the number of individualized therapies it can generate in parallel but its capabilities are constantly advancing. The time required from sample acquisition to vaccine release is already well beyond the 89- to160-day range it reported, in the July 13, 2017, issue of Nature, when it unveiled clinical proof-of-concept data on its mRNA-based cancer vaccines in melanoma patients.
"The processes that we have now are significantly different and have a very different time to delivery," Marett said. Getting below four weeks is key to a commercially viable product for patients with metastatic cancer. "Doctors and patients cannot wait," he said.
The company does not plan to unveil any significant clinical trial data this year. But its in-house and partnered programs continue to consume large quantities of cash. Its eye-catching 2016 deal with the Genentech arm of Basel, Switzerland-based Roche Holding AG on individualized mRNA-based vaccines brought it $310 million in up-front and early stage milestone payments, but all costs and eventual profits are split equally between the two firms. "It's not a biotech budget we're cost-sharing on; it's a big pharma budget," Marett said.
Its other collaborations, with Indianapolis-based Eli Lilly and Co. on the discovery of novel tumor targets and their associated T-cell receptors (TCRs), with Paris-based Sanofi SA on mRNA-based cancer immunotherapies and with Copenhagen, Denmark-based Genmab A/S on bispecific antibody development, all involve co-development and co-commercialization options as well. "All of these, of course, have fairly solid budgets which we have to contribute to," he said.
Given the scale of its cash needs, the company may in time consider spinning out a specific activity, such as its cell or gene therapy development units, Jeggle said, but there are no concrete plans to do so at present.
The current objective is to build options into the company, to enable it to navigate its future course from a position of strength. It is already being dubbed the "German Genentech."
"To be honest, for me it's a once in a lifetime [opportunity]," Jeggle said.
The deal is the fourth largest private equity transaction involving European biotech, bettered only by the Basel-based pharma conglomerate Roivant Sciences GmbH, which raised $1.1 billion in 2017, the London-based Anglo-Russian pharma venture Pro Bono Bio plc, which raised $600 million in 2011, and Oxford, U.K.-based TCR specialist Immunocore Ltd., which raised $320 million in 2015.