Oncosec Partners With Two Companies, Gets $30 Million
Oncosec, a Pennington-based biotech company that is developing immunotherapy for skin and breast cancer (U.S. 1, May 22, 2019), has formed a strategic partnership with two companies and received $30 million in funding. The cash infusion will help Oncosec carry on clinical trials of its product candidate, TAVO, which, is an immunotherapy agent injected directly into tumors using a device that the company has developed.
Oncosec, with just 15 employees in its Main Street headquarters, has partnered with Boston-based biopharmaceutical company Sirtex to market TAVO if and when it wins FDA approval. Oncosec CEO Daniel J. O’Connor said Sirtex’s success in marketing its own product, tiny porcelain spheres that help deliver drugs to tumors, indicates that it could be successful in marketing Oncosec’s product, part of which is a medical device. Oncosec will pay a royalty “in the low single digits” to Sirtex for marketing.
The second company, China Grand Pharma (also a minority shareholder in Sirtex) obtained a license to market TAVO in the Asian market outside Japan.
O’Connor said the investors paid Oncosec $2.50 a share, a premium over its stock price. The transaction resulted in CGP owning 45 percent of Oncosec stock, and Sirtex another 8 percent. Oncosec’s shareholders approved the deal. “At the moment, biotech companies, when they raise capital, are giving discounts to the stock price and giving warrants as sweeteners to the deal,” O’Connor said. “We avoided all of that.”
CGP will conduct the clinical trials necessary to bring the drug to market in China, and Oncosec will collect up to a 20 percent royalty. Oncosec will also obtain access to the clinical data generated by CGP’s studies. “Clinical data is expensive, and getting it in any market is very helpful,” O’Connor said. “We will be able to use it in the U.S. and Europe and Japan and other markets.” O’Connor says the Chinese market is “impenetrable” for U.S. companies without working with a local partner.
O’Connor said Oncosec was doing well on other fronts. Many executives in biotech business in general are feeling nervous about the results of the upcoming presidential election. BioNJ, a pharmaceutical trade group, has been lobbying against legislation to control drug prices. O’Connor said he is less concerned about that issue because TAVO would be cost-effective to manufacture. “We have the opportunity to have that reflected in pricing,” he said.
In addition to its study on TAVO, in which the drug is being administered in combination with Merck’s Keytruda immunotherapy agent, Oncosec is testing its candidate’s safety and effectiveness against a particularly treatment-resistant form of breast cancer called triple-negative breast cancer.
O’Connor expects the deal will result in further expansion of Oncosec’s New Jersey presence. (The company also has a lab in San Diego, where it was founded.) Even if the company outgrows its office space, O’Connor anticipates staying in New Jersey, thanks in part to the state’s Net Operating Loss program, which Oncosec has taken advantage of. TNOL is an economic development program that allows research and development companies to raise cash by “selling” their losses to other companies, which can claim them for tax purposes. O’Connor said Oncosec has made $800 to $900,000 from TNOL, raising capital without having to sell stock.
“New Jersey is the only state in the U.S. that offers that program,” he said. “It’s a really tangible incentive.”
The headquarters of Oncosec is a non-traditional one for a pharmaceutical company. Oncosec occupies a 19th-century building that was a fire house and a town hall at different points in its history. O’Connor says that if they outgrow the space, they will likely seek another “atypical business environment.” He said it is cost-effective compared with a sterile and isolated corporate office park.
Keeping overhead low is critical for a company like Oncosec that needs to use all its resources on gathering clinical data in an effort to get its product to market. The board table was bought from a Crate & Barrel outlet store for $90. “We’re always looking for ways to be efficient,” O’Connor says.
OncoSec, 24 North Main Street, Pennington 08534. Daniel O’Connor, CEO. www.oncosec.com.
CytoSorbents Device to Possibly Treat Coronavirus Victims
CytoSorbents, a biotech company that makes a blood purification device to treat deadly inflammation in critically ill and cardiac surgery patients, is partnering with a Chinese company to use its device to treat victims of the coronavirus.
Under the terms of the agreement, CytoSorbents and China Medical Systems will partner together to earn regulatory clearance to import CytoSorb into China under the “fast-track” review process created by Chinese regulators to respond to the 2019 novel coronavirus outbreak.
CytoSorbents will donate initial CytoSorb devices and provide product, training, and support to CMS to introduce CytoSorb initially into four hospitals in the Wuhan, China, area. The therapy will be evaluated in severe COVID-19 coronavirus patients with a systemic inflammatory response who are being treated with either continuous renal replacement therapy or extracorporeal membrane oxygenation. During the initial term of the agreement, CytoSorbents and CMS will explore the possibility for future commercial collaboration in China. The financial terms of the agreement have not been disclosed.
“We are excited to collaborate with CMS to bring CytoSorb to the patients and physicians in China that are dealing with this devastating COVID-19 coronavirus pandemic,” said Chris Cramer, vice president of business development of CytoSorbents. “To date, this infection has killed approximately 2 to 3 out of every 100 patients it infects, mainly by causing severe lung injury and acute respiratory distress syndrome (ARDS), shock, and multi-organ failure.
“Though CytoSorb has not yet been used to specifically treat patients infected with the COVID-19 coronavirus, it has been used to help treat shock, ARDS, multi-organ failure, and other complications of cytokine storm and excessive, deadly inflammation in thousands of patients with both bacterial and viral infection and sepsis across the world.”
Dr. Huaizheng Peng, general manager of global investment and operations of CMS, said the technology could be helpful. “CMS looks forward to working with CytoSorbents to bring their innovative CytoSorb blood purification therapy to the forefront of the response to the COVID-19 pandemic,” he said. “We do so with a sense of social responsibility to help those stricken at the epicenter of the outbreak, just one of the many areas in China that we serve. We believe that CytoSorb may provide physicians a powerful new approach to help patients who are suffering from severe coronavirus infection.”
The clinical features of the COVID-19 coronavirus, relationship to cytokine storm, and potential role of CytoSorb in treating patients suffering from severe coronavirus infection were described by the company recently (U.S. 1, January 29, 2020).
Furthermore, the use of extracorporeal therapies, such as CytoSorb, were highlighted in a recent publication in Lancet Respiratory Medicine by Drs. Claudio Ronco, Paolo Navalesi, and Jean Louis Vincent, titled, “Coronavirus epidemic: preparing for extracorporeal organ support in intensive care.”
These publications provide the rationale to potentially use CytoSorb, the first specifically-approved extracorporeal cytokine adsorber in the European Union, in this setting. CytoSorb is distributed in 58 countries worldwide, and is available in Hong Kong, Vietnam, Malaysia, Germany, United Kingdom, Italy France, Spain, Belgium, United Arab Emirates, India, Russia, Finland, Sri Lanka, and Australia where patients infected with the virus have been reported.
CytoSorbents Inc. (CTSO), 7 Deer Park Drive, Suite K, Monmouth Junction 08852. 732-329-8885. Phillip Chan, CEO. www.cytosorbents.com.