Lyell aims to follow Juno, Sana as Wall Street cools to biotech IPOs

 

• Lyell Immunopharma, a well-funded cell therapy developer aligned with GlaxoSmithKline and co-founded by former National Cancer Institute director Rick Klausner, has outlined plans to go public with a group of experimental cancer treatments. 
• The Californian biotech is one of a growing list of companies aiming to develop cell therapies for solid tumors, which have so far proven intractable targets for cell-based treatments but are among the most common cancer types. Lyell uses technologies meant to improve T cell function and durability, which the biotech claims could broaden the reach of treatment and prevent relapses. None of its programs will be in human testing until at least next year, however. 
• Lyell could become the 10th cell or gene therapy maker to go public in 2021, which would far outpace any of the past four years, according to data compiled by BioPharma Dive. But the biotech is shooting for an IPO at a difficult time. Most members of the 2021 class trade below their offering price, and several have sat in the queue for more than a month.

Three years after Celgene paid $9 billion to buy Juno Therapeutics, two biotechs with strong ties to the pioneering cell therapy developer are testing the public markets. And as with Juno, both of them come with very high expectations.  

First came Sana Biotechnology, whose $588 million IPO in February remains the sector's largest of the year and third-biggest since 2018, according to BioPharma Dive's database. Sana raised more than $700 million while privately held, was co-founded by Juno executives Steve Harr and Hans Bishop, and its top investor was Arch Venture Partners, the VC firm that originally backed Juno. 

Lyell now aims to follow in Sana's footsteps. Two Juno co-founders, Klausner and Stan Riddell, were both involved in Lyell's formation. Riddell's research contributed to the Juno cell therapy Breyanzi, now owned by Bristol Myers Squibb. The company raised even more than Sana — nearly $1 billion, according to its prospectus — before seeking an IPO. And Arch has reprised its role as top investor again, holding roughly 17% of the company. 

Both are part of a new wave of companies trying to advance the field of cell therapy beyond the blood cancers that Breyanzi and a handful of similar products are approved to treat. Sana, for instance, wants to tweak an array of different cell types to treat a range of diseases, not just genetically modify T cells for blood cancers, as Juno did. 

Lyell, by contrast, uses two complementary genetic reprogramming technologies to boost the function of T cells and thus, at least theoretically, make any type of T cell therapy more potent and broaden its reach. One of those technologies combats the T cell "exhaustion" that occurs, its founders discovered, more often in the solid tumors that cell therapies have struggled with. Another gives T-cells durable "stemness," or ability to self-renew and multiply. 

Lyell is using both to go after solid tumors — non-small cell lung cancer, triple-negative breast cancer and more — with multiple different types of cell therapies. One treatment, for example, is a CAR-T therapy in the mold of Breyanzi, Novartis' Kymriah and others. Another is a similar, but notably different form of cell therapy known as tumor-infiltrating lymphocyte, or TIL, being advanced by biotechs like Iovance Biotherapeutics.

Lyell is leaning on those technologies, its high-profile founders and Juno ties, and a wide-ranging alliance with GlaxoSmithKline — one of the firm's top investors — to fuel its push to Wall Street. That type of strategy worked for Sana, but Lyell is gunning for an IPO when the market has cooled to recent biotech offerings. 

On the positive side, 34 drug developers have raised at least $50 million in an IPO this year, more than doubling the pace of such offerings in any year since 2018. And as was the case in 2020, most of them are either in preclinical or early-stage testing, according to BioPharma Dive's database. That indicates investors "may still be enthusiastic over new technologies and ‘innovation,'" Jefferies analyst Michael Yee recently wrote in a research note. 

But only two biotechs have gone public in May after at least nine in each of the prior three months. (The tally for May could potentially rise to four by the end of the week.) Six have been in the IPO queue for at least a month without setting terms for their offerings, suggesting they won't get out for at least a while longer. And a majority of the biotechs in 2021's IPO class now trade below their offering price. That includes Sana, which was given one of the largest initial biotech valuations ever but whose shares have fallen roughly 20% below their $25 debut. 

Those results are a break from prior years and suggest "investors will be more valuation sensitive this year," Yee wrote. 

https://www.biopharmadive.com/news/lyell-ipo-cell-therapy-cancer/600847/