Adicet Bio, a privately held preclinical biotech looking to move ahead its “off-the-shelf” CAR-T cell therapies, has struck a deal with struggling resTORbio to use its Nasdaq listing as a backdoor to the public markets.
The companies on Wednesday announced an agreement to combine in a type of transaction sometimes referred to as a “reverse merger.”
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Earlier this year Boston-based resTORbio (NASDAQ: TORC) announced it was seeking someone to buy the firm or strike a deal for its technology. That decision was made following the November failure of its lead drug in a pivotal trial treating lung infections in the elderly.
According to the terms announced Wednesday, the newly formed company would retain the Adicet Bio name and use the combined resources to advance its allogeneic cell therapy assets, including its lead program, ADI-101, a treatment designed to target the cancer protein CD20 in patients with non-Hodgkin lymphoma.
Adicet CEO Anil Singhal won’t lead the combined company, however: The agreement calls for Chen Schor, CEO of resTORbio, to head the firm after the merger, and Singhal to become a board advisor. ResTORbio’s chief scientific officer, Lloyd Klickstein, who joined the company about a year ago from Novartis Institutes for Biomedical Research, will also continue with the new company as its chief innovation officer.
Adicet’s chief medical officer, Francesco Galimi, will retain that position, and Adicet’s chief scientific officer, Stewart Abbot, will stay with the combined company as CSO and chief operating officer. Rounding out the C-suite is Carrie Krehlik, Adicet’s chief human resources officer, in the same role.
Schor, in a statement, said the merger would allow Adicet to move multiple programs into the clinic and to expand its pipeline. Adicet’s two preclinical programs use engineered versions of a rare subset of T cells, called gamma delta T cells, which it harvests from healthy donors. The use of gamma delta cells, instead of the alpha beta T cells commonly used in CAR-T therapy, is intended take advantage of the cells’ properties to develop more effective and safer treatments.
The Menlo Park, CA-based biotech anticipates data from a clinical trial of ADI-101 sometime in 2021, according to an investor presentation. That, of course, is premised on the assumption that the company will get the FDA’s permission to move into the clinic and conduct early-stage testing. Other post-merger priorities include starting human tests of ADI-002, an investigational treatment for hepatocellular carcinoma that targets the cancer protein GPC3.
The company is also working on novel TCR-like antibodies directed at intracellular targets on solid tumors, for which cell therapy hasn’t worked yet. Merging with resTORbio would provide Adicet with enough resources to continue its work developing novel cell therapies into 2022, the companies said.
The combined entity also intends to pursue development of the resTORbio drug that failed the pivotal trial in November for an undisclosed COVID-19-related indication. The drug is designed to block an enzyme called TORC1, which contributes to the decline in function of aging organ systems. Previously resTOR had highlighted the drug’s potential as a treatment for Parkinson’s disease.
ResTORbio reported about $91.5 million in cash, cash equivalents, and short-term investments as of Dec. 31.
Were the all-stock transaction to garner shareholder approval, Adicet shareholders would become the majority owner of the combined company, controlling 75 percent of its stock. If each company’s shareholders approve the deal, the firms—which plan to maintain offices in Menlo Park and in Boston—anticipate it closing in the second half of the year.
Investors seemed to like the idea: resTORbio’s stock price jumped 26 percent Wednesday to $1.54 apiece from $1.22 per share the day prior. For context, when resTORbio went public in 2018, it priced its shares at $15 apiece.
Adicet launched in 2015 with $44 million in Series A financing. About six months ago, the biotech raised a Series B round of $80 million from investors including OrbiMed Advisors, Israel’s aMoon, Novartis Venture Fund, Regeneron Pharmaceuticals (NASDAQ: REGN), and the investment arm of Johnson & Johnson (NYSE: JNJ).
Regeneron has been a partner of Adicet’s since August 2016, when the firms struck up a collaboration around the development of “next-generation” engineered immune cell therapeutics based on the smaller company’s technology.