COVID Pandemic Prompts Renewed Interest in Biotech Startups

The momentum of biotech and biopharma companies is on the rise in anticipation of a new wave of emerging therapies moving through the industry’s development pipeline. In addition, the COVID-19 pandemic highlighted the importance of companies that can react quickly to circumstances and, in some cases, pivot their technology to meet immediate and changing therapeutic needs. New research into personalized medicines is giving rise to advanced technologies that speed R&D timelines and is also the industry’s understanding of biological and immunological processes.

Attractive investment target

Biotech and biopharma companies have become an attractive investment following a renewed focus on personal health and wellness brought on by the COVID-19 pandemic, says Kathy Quigley, analyst at Touchdown Ventures, a US-based venture capital firm. The pandemic also brought on an increased appreciation for what it takes to develop and manufacture a new drug, she points out.

“The pandemic initially halted a meaningful number of clinical trials just when the world was desperate for pharmaceutical solutions. The need to innovate and speed up drug-to-market timelines was made abundantly clear, and with these exposed vulnerabilities in the healthcare system, investors shifted their focus more to pharmaceutical tech startups,” Quigley states.

Catching investor interest

With a robust landscape of biotech startups, are there specific areas of life sciences technology or life sciences skill sets or assets that are particularly sought out as investment targets?

To answer this question, Quigley explains that Touchdown Ventures views the pharmaceutical tech (“pharma tech”) space as a historically under-invested space with great potential. “We define this category as technologies that improve or enhance the pharmaceutical industry’s value chain. This includes artificial intelligence (AI) for drug discovery platforms, software applications that enable decentralized clinical trials, innovations progressing the industry towards continuous manufacturing, software or hardware that reduces drug counterfeiting, and so on. The pharma tech space alone experienced a 125% jump in capital invested between 2019 to 2020,” Quigley remarks.

Furthermore, AI for drug discovery and decentralized clinical trial startups have also received increased investment, as traditional internal pharmaceutical R&D productivity continues to decline, Quigley notes. “We’ve also seen a correlation between the increasing availability of real-world patient data and an interest in solutions that address requirements of doctors, patients, and regulators,” she adds.

Lastly, although drug delivery is an area that falls outside of pharma tech, the sector holds great potential. “As the market puts greater emphasis on what’s best for the patient, we expect more demand for novel delivery methods,” Quigley states.

In terms of investment numbers, Quigley notes that over $60 billion has been invested in biopharma and biotech startups through the third quarter of 2021, which surpasses last year’s $53.7 billion-worth of investment, a record breaker, according to Pitchbook (1).

Making waves

Among the emerging biotech and biopharma companies that have been making drug development progress recently is Atara Biotherapeutics, a South San Francisco-based off-the-shelf allogeneic T-cell immunotherapy company specializing in therapeutics for cancer and autoimmune diseases.

The company is harnessing the body’s immune system, specifically via the T cells. Epstein-Barr virus (EBV), for instance, is one of the most common human viruses with 90% of adults worldwide harboring dormant infections, says Cokey Nguyen, chief scientific officer at Atara Biotherapeutics. Once infected, he explains, T cells are created to target and destroy EBV-infected cells. These T cells have unique characteristics that make them prime candidates for the creation of cell-based living medicines.

“EBV has been linked to many cancers and autoimmune diseases. Atara’s novel EBV T-cell product candidates (known as allogeneic) are manufactured from unrelated healthy, living donors, stored in inventory, and delivered to patients with the goal to reinforce their immune systems to treat diseases that are directly EBV-associated, such as EBV+ post-transplant lymphoproliferative disease, or to treat blood cancers and solid tumors by modifying these cells with a chimeric antigen receptor (CAR),” Nguyen says.

He further explains that EBV T cells may be additionally enhanced with minimal genetic modification to overcome the hostile tumor environment in solid tumors to fight disease.

Nguyen observes that the allogeneic cell therapy field is exploding, “with T-cell approaches leading innovation as the main factor behind successful immuno-oncology therapies.” He explains that, while T-cell therapies have been life-changing for many patients, the T-cell therapies available commercially today are derived from collecting, genetically engineering, and growing a patient’s own T cells (autologous). This is a time-consuming process that is difficult to scale for treating large numbers of patients. Additional limitations include difficulty in treating solid tumors, safety issues, and re-dosing challenges, Nguyen points out. He also explains that these issues may currently limit a patient’s ability to be treated with these promising T-cell therapies.

In comparison, allogeneic cell-based platforms hold the promise of personalized, off-the-shelf treatments manufactured at scale and quickly delivered to the patient, Nguyen asserts. Allogeneic cell therapies therefore have the potential to overcome typical barriers that have limited the success of current autologous T-cell technologies. “However, most allogeneic immunotherapies under investigation use cells that require T-cell receptor (TCR) or human leukocyte antigen (HLA) gene editing to confer sufficient safety, expansion, and persistence characteristics,” he says.

EBV specific T cells are one example of a T-cell platform that is in development for cancer and autoimmune diseases, including multiple sclerosis. According to Nguyen, EBV T cells naturally possess key immunological features that are required for successful allogeneic T-cell immunotherapies, including the ability to target disease at its source, like EBV-driven diseases, with proven trafficking, expansion, and persistence without TCR or HLA gene editing.

Where is R&D trending?

“Cell and gene therapies are revolutionizing the treatment of many diseases and advancing personalized medicine approaches for patients,” Nguyen asserts. He notes that much emphasis has been placed on the development of cellular immunotherapies over the past decade, and autologous CAR T-cell therapies have demonstrated success, especially against blood cancers.

“When looking at today’s CAR T field, the landscape has dramatically changed. Patients with B-cell lymphomas and other similar cancers did not have a lot of hope 20 or even 10 years ago. Now, we are talking about how to overcome limitations with autologous therapies with off-the-shelf approaches. What makes the T-cell immunotherapy platform so versatile is its flexibility to fight cancer or target drivers of inflammation in autoimmune conditions, but more research is needed,” Nguyen explains.

“Atara believes that the next evolution in immunotherapy currently under investigation is a very different technology: allogeneic T cells that aim to leverage the power of a healthy donor’s immune system,” Nguyen continues. To treat solid tumors, for example, T cells need to persist in a challenging environment. Thus, a great deal of R&D—both from Atara and industry-wide—is focused on identifying new approaches and technologies that can eliminate such cancers, he asserts.

“Our EBV T-cell platform can also incorporate next-generation armoring technology in addition to the CAR that may help them persist longer in the body and avoid tremendous selection pressure from solid tumor microenvironments that suppress and exhaust T cells,” Nguyen emphasizes.

Wanted: skill sets

One of the main challenges in the biopharma industry today is making cell therapies accessible to patients with a variety of diseases, particularly in oncology and beyond. Nguyen points out that, currently, even a state-of-the-art autologous T-cell process can require 20–27 days after leukapheresis. “That process is rigorous, but manufacturing failures can occur, and patients sometimes can’t wait,” he cautions.

As a result, Atara has needed to ask critical questions about how it can get its therapies to patients and how it can simplify administration requirements for physicians and nurses. Scalability can help address these concerns, which is a potential benefit offered by an allogeneic approach, Nguyen observes. “Atara, for example, has invested in scalable technologies: we’re transitioning from static, gas-permeable vessels to stirred-tank bioreactors and to semi-closed systems with automation capabilities. Scaling up in that way will help to produce enough product to address unmet medical needs. But this takes investment,” Nguyen says.

Fortunately, there are many intelligent people entering the field of cell therapy, optimizing every step in the workflow to maximize cell therapy production. Nguyen sees that bioprocessing is continually improving, with end-to-end automation and integration. He expects that this continual improvement will help standardize the process so it can be replicated in different facilities. “Ultimately, that’s going to take a village. That’s why it’s exciting to see all the innovation happening in everything from clinical trials to bioprocessing to cold-chain shipping, so we can deliver therapies to more people in need,” he states. “So, what do we need more of? Time! We’re breaking new ground every day.”

Scoring collaboration partners

Another emerging biopharma firm that has made significant strides in recent months is Werewolf Therapeutics, a Cambridge, Mass.-based biopharmaceutical company researching conditionally activated therapeutics in cancer treatment. In August 2021, the company secured a clinical trial collaboration with Merck (known as MSD outside of the United States and Canada). Under the agreement, the companies will evaluate Werewolf Therapeutics’ WTX-124 indukine program in conjunction with Merck’s anti-programmed cell death receptor-1 (PD-1) therapy KEYTRUDA (pembrolizumab) (2).

WTX-124 is a systemically delivered, conditionally activated interleukin 2 (IL-2) indukine molecule. It has been engineered to minimize the severe toxicities observed with recombinant IL-2 therapy and maximize clinical benefit when administered as monotherapy or in combination with checkpoint inhibitors in multiple tumor types. Werewolf Therapeutics plans to submit an investigational new drug (IND) application for WTX-124 to FDA in the first half of 2022. Subject to FDA clearance of the IND application, Werewolf Therapeutics expects to promptly initiate a Phase I clinical trial evaluating WTX-124 as a monotherapy and as a combination therapy with KEYTRUDA for the treatment of solid tumors. While time is a limiting factor for both patients and therapy innovators, that same time element is consequently highly conducive to targeted sector investment strategies.

References

1. Pitchbook, “Emerging Tech Research: Enterprise Healthtech Q3 2021,” Press Release, Nov. 10, 2021.
2. Werewolf Therapeutics, “Werewolf Therapeutics Announces Clinical Trial Collaboration with Merck on its WTX-124 INDUKINE Program,” Press Release, Aug. 18, 2021.

About the author

Feliza Mirasol is the science editor for BioPharm International.