Regeneron Pharmaceuticals is expanding into cell therapy research, announcing a deal Tuesday to acquire the drug pipeline of 2seventy Bio and bring on many of the smaller biotechnology company’s employees.
The experimental cell therapies Regeneron acquires will be housed in a newly created research and development unit called Regeneron Cell Medicines, to be led by 2seventy’s top scientist Phil Gregory. Approximately 150 staff from 2seventy will join Gregory in transitioning to Regeneron.
“Our expertise in antibody technologies and emerging genetics capabilities, combined with 2seventy’s cell therapy platforms, presents a significant opportunity to address cancer and other serious diseases in new and impactful ways,” said George Yancopoulos, Regeneron’s chief scientific officer, in a statement.
Regeneron will pay $5 million upfront for full rights to 2seventy’s experimental drug programs, a tiny sum for much of a company that spun out of Bluebird Bio two years ago with considerable buzz and more than $400 million in cash.
Shares in 2seventy have lost much of their value since then, however, amid slow research progress and an ebbing market for biotech stocks. Last September, the company cut 40% of its workforce in a major restructuring meant to extend its operating runway.
With its pipeline sold, 2seventy will prioritize Abecma, the approved cell therapy for multiple myeloma it co-developed with Bristol Myers Squibb. Sales have faltered as Bristol Myers struggled with manufacturing and competing drugs gained ground.
The companies aim to return Abecma to growth and are counting on securing an expanded approval in earlier multiple myeloma treatment this year.
“Moving forward, 2seventy will be sharply focused on Abecma, with a streamlined team and a dramatically different cost structure and financial profile,” said Chip Baird, who will take over for Nick Leschly as 2seventy’s chief executive.
Leschly, the longtime CEO of Bluebird who became 2seventy’s head after the split, will become chair of the company’s board.
In addition to transitioning staff over to Regeneron, 2seventy is also laying off an unspecific number of employees, Baird said. About 65 people will remain at 2seventy, mostly in “quality and supporting functions,” according to the company’s statement.
The restructuring will save about $150 million in spending this year and $200 million next year, extending 2seventy’s runway “beyond 2027.”
For Regeneron, the deal gives it a pipeline of cell therapies for cheap, as well as a group of experienced staff to continue developing them. Among the assets it will acquire are treatments for non-Hodgkin’s lymphoma, acute myeloid leukemia and ovarian cancer, as well as projects in autoimmune disease.
Regeneron will also sublease a portion of 2seventy’s office, laboratory and manufacturing space in Cambridge, Massachusetts, and its entire facility in Seattle, Washington.
Should one of the experimental drugs receive a “major market approval,” Regeneron would owe a milestone payment to 2seventy, as well as a low single-digit percent sales royalty.
The companies expect their deal to close in the first half of 2024.