London-based GlaxoSmithKline plc snagged a next-generation T-cell vaccine platform and several promising early stage candidates in its buyout of Swiss firm Okairos AG for €250 million (US$323.8 million).

It's an impressive deal for several reasons, not least because it represents a greater-than-10x return for Okairos' investors, which had put a mere €23.2 million into the firm since it spun out of Merck & Co. Inc. in 2007. The firm's cash-efficient model was helped substantially by its grant haul over the years. The firm obtained roughly €25 million from the likes of the National Institutes of Health, the European Union, the Medical Research Council and the Bill and Melinda Gates Foundation.

Okairos was able to generate "a significant amount of data" with a less-than-traditional amount of venture capital, explained Brad Bolzon, managing director of Versant Ventures, which led the company's $20.9 million Series B round in 2010. Other investors included Boehringer Ingelheim Venture Fund, BioMedPartners, Life Sciences Partners and Novartis Venture Funds. (See BioWorld International, Sept. 29, 2010.)

Another highlight of the deal is that GSK paid the full amount up front in cash, a nice break from the growing trend of contingent value rights and milestone-based M&A deals. It's especially noteworthy since GSK is known more for its collaborations than acquisitions – though last year's whopper of a deal for Benlysta (belimumab) partner Human Genome Sciences Inc. was an exception – and since other vaccine developers nabbed in the past year have involved earn-outs.

Osaka, Japan-based Takeda Pharmaceutical Co. Ltd., for example, which launched a global vaccines business in 2012, picked up LigoCyte Pharmaceuticals Inc. last fall for $60 million up front and future contingent payments and, earlier this year, added Inviragen Inc. for $35 million up front and up to $215 million in milestones. (See BioWorld Today, Oct. 8, 2012, and May 15, 2013.)

"A number of pharmas were in discussion" for Okairos, Bolzon told BioWorld Today. "GSK moved very aggressively."

He attributed the interest to the emerging area of T-cell vaccines. For a long time it was thought that vaccines should elicit antibody responses. But an antibody response alone is often not enough to adequately protect from or treat many diseases.

Okairos' platform is designed to create vaccines capable of producing a T-cell-based immune response, specifically evoking a CD8 T-cell response.

The role of CD8 T cells has been linked to a number of infectious diseases, including HIV, hepatitis C virus (HCV), malaria, influenza, respiratory syncytial virus (RSV) and even some cancers, the company said.

"Okairos has the means of addressing unmet needs in multiple fields," Bolzon said. "One is RSV, and development of that program was one of the triggers" of the GSK deal.

There currently are no vaccines protecting children against RSV infection, which causes a viral lower respiratory tract infection and is estimated at 64 million cases each year worldwide, with about 160,000 deaths. In preclinical models, Okairos said the RSV vaccine candidate stimulated a strong neutralizing antibody and T-cell response. The firm launched a Phase I study in February in healthy volunteers in the UK, with endpoints measuring the vaccine's safety and immunogenicity.

Another draw was Okairos' earlier-stage cancer vaccine. The firm also has in its pipeline a preventive vaccine for HCV and vaccines targeting malaria, HIV, flu, Ebola and tuberculosis.

But the attraction for GSK wasn't based on a single program. The big pharma firm is looking to incorporate the technology into its existing vaccines franchise for the development of new T-cell-based vaccines, both for prophylactic and for therapeutic indications.

The deal will "enable GSK to build on the hard work we have put into developing our vaccines and platforms to the stage that they are at today," said Okairos' CEO, Riccardo Cortese, who co-founded the firm.

Okairos is not the only biotech in the T-cell vaccine space – others include Vaximm AG, Circassia Ltd. and Seek Ltd. – but its technology has an interesting feature. Like many vaccine platforms, it requires the use of adenovirus vector to deliver the gene coding for an antigen, which elicits the T-cell response. But rather than using a human adenoviral vector, Okairos opted for one from a chimpanzee.

The advantage is that the deactivated chimp-derived adenovirus can escape detection from a human's natural immunity, so neutralizing antibodies won't stop the vector before it has time to elicit the T-cell response. Okairos also developed its own cell line, Procell92, to support adenovirus vector growth.

With headquarters in Basel, Switzerland, Okairos also has facilities in Rome and Naples, Italy. It was not immediately known whether GSK intends to keep those facilities operational, but Bolzon said the team at Okairos was also part of the attraction.

GSK "recognize[s] the value of the entrepreneurial spirit and wants to keep that alive and improve on it by providing resources and know-how," he said.