Kite, a Gilead Company, has agreed to co-develop and co-commercialize Arcellx’s lead candidate CART-ddBCMA as a treatment for relapsed or refractory multiple myeloma, through a collaboration that could generate more than $4 billion for Arcellx.

The collaboration comes less than a month after Arcellx launched the Phase II pivotal iMMagine-1 trial (NCT05396885), an open-label study with an estimated 110 participants. At the time, Arcellx said it planned to dose patients in the study with CART-ddBCMA by year’s end. Arcellx also said it had begun to scale trial operations by initiating clinical sites, enrolling patients, and overseeing the manufacturing of cells with Oxford vector through Lonza.

CART-ddBCMA generated positive results from a Phase I expansion trial (NCT04155749) in patients with relapsed or refractory multiple myeloma, which the company announced Friday in addition to news of the Kite partnership.

According to Arcellx, CART-ddBCMA achieved a 100% overall response rate (ORR) in all 38 evaluable patients with median follow-up of 15 months as of the October 31, 2022, cutoff date, per International Myeloma Working Group criteria. Thirty-four of 38 patients (89%) achieved at least a very good partial response (VGPR) or higher (including seven VGPR patients), while 27 of the 38 (71%) achieved complete response (CR) or a stringent complete response (sCR).

The CR rate was comparable to the 67% to 68% 12-month CR rates shown by Legend Biotech and Johnson & Johnson’s Janssen Pharmaceutical Cos. for Carvykti® (ciltacabtagene autoleucel) in 57 patients evaluated in the LEGEND-2 trial (NCT03090659) and 97 in the CARTITUDE-1 trial (NCT03548207), both Phase I/II studies, noted Jefferies analyst Michael Yee. The FDA approved Carvykti in February to treat adults with relapsed or refractory multiple myeloma after four or more prior lines of therapy.

Daina M. Graybosch, PhD, senior managing director, immuno-oncology and a senior research analyst with SVB Securities, wrote in a research note Friday that CART-ddBCMA “is more valuable now that Kite/Gilead will co-develop and co-commercialize the program with Arcellx and applaud this deal.”

Arcellx investors appeared to agree with Graybosch, responding to news of the collaboration with a buying surge that sent the company’s shares soaring 29% on Friday, from $21.68 to $29.04. However, shares of Gilead dipped nearly 2%, from $89.47 to $87.97.

“Kite is the best possible partner for Arcellx, given Kite’s experience developing class-leading CD19 CAR-T products,” Graybosch added. She cited Kite’s success in developing and commercializing two cell therapies: Tecartus® (brexucabtagene autoleucel), approved in 2021 for adults with relapsed or refractory mantle cell lymphoma (MCL), or with relapsed or refractory B-cell precursor acute lymphoblastic leukemia (ALL); and Yescarta® (axicabtagene ciloleucel), approved by the FDA in 2017 as the second CAR-T therapy with oncology indications, namely several forms of lymphoma.

Yescarta’s indications include relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy, including diffuse large B-cell lymphoma (DLBCL).

Growth driver

“Kite has been a quiet but steady growth driver for GILD [Gilead] and annualizing at $1.5B+ with more growth expected through further 2L [second-line treatment] penetration for Yescarta in DLBCL,” Yee wrote on Friday. “Thus, the ACLX [Arcellx] deal should give investors better visibility into cell therapy growth as Kite will remain an important pillar to GILD.”

CART-ddBCMA is a B-cell maturation antigen (BCMA)-specific chimeric antigen receptor (CAR) modified T-cell therapy consisting of autologous T cells that have been genetically modified to target multiple myeloma.

CART-ddBCMA uses Arcellx’s novel D-Domain, a fully synthetic protein BCMA binder with a hydrophobic core whose structure is designed to enable higher transduction efficiency, high cell surface expression, and low tonic signaling. The D-Domain binder is also designed to improve target specificity while enhancing binding affinity—and is used in place of the traditional scFv binding domain of conventional cell therapies.

The FDA has granted CART-ddBCMA its Fast Track, Orphan Drug, and Regenerative Medicine Advanced Therapy (RMAT) designations.

“Combining our potentially best-in-class CART-ddBCMA therapy for multiple myeloma with Kite’s global leadership in cell therapy provides the foundation for us to commercialize our therapy at scale,” Rami Elghandour, Arcellx’s chairman and CEO, said in a statement. “Most importantly this collaboration is focused on accelerating access for patients in need.”

According to a regulatory filing, Kite and Arcellx have also agreed to collaborate on the development and commercialization of next-generation autologous CAR T-cell therapy products that use D-Domain, and non-autologous cell therapy products using the D-Domain—in all cases as treatments for myeloma.

Arcellx will receive an option to co-develop and co-commercialize next-generation autologous programs, while Kite will be offered an option to selected ARC-SparX dosable and controllable CAR-T therapy programs in myeloma. Arcellx has two ARC-SparX programs, both in Phase I: a study of ACLX-001 for r/r MM, launched in the second quarter of 2022; and a study of ACLX-002 in relapsed or refractory acute myeloid leukemia and high-risk myelodysplastic syndrome, begun in the fourth quarter of 2022.

$225M upfront

Kite has agreed to pay Arcellx $225 million cash upfront, and make a $100 million equity investment in Arcellx, a developer of cell immunotherapies for cancer and other incurable diseases based in Redwood City, CA. Kite also agreed to pay Arcellx up to $3.9 billion tied to achieving clinical, regulatory, and commercial milestones.

Kite agreed to oversee manufacturing and all manufacturing expenses associated with commercial readiness. Kite and Arcellx agreed to split U.S. study costs 50/50 for iMMagine-1, as well as iMMagine-2—an expansion study to assess CART-ddBCMA efficacy in earlier line populations with multiple myeloma—and future clinical studies for CART-ddBCMA and any other co-commercialized product.

Outside the United States, Kite will shoulder 60% of study costs, with the remainder to be borne by Arcellx.

As for commercialization, Kite and Arcellx will split profits 50/50 for CART-ddBCMA and other products they co-commercialize. All other products will be commercialized by Kite, with Arcellx to receive royalties in the low to mid-teens. Outside the United States, Kite will commercialize CART-ddBCMA and Arcellx will receive low to mid-teen royalties on sales.

In the United States, Arcellx and Kite agreed to equally share profits and losses from the commercialization of CART-ddBCMA and any future products for which Arcellx has exercised its option to co-promote. For co-promote products outside of the United States and for any licensed product that is not a co-promote product, Arcellx will be eligible for tiered royalties in the low- to mid-teen percentages

The deal is expected to close in the first quarter of 2023, subject to expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions.

“The collaboration with Arcellx enables Kite to expand into a new area of high unmet need and bring a potentially best-in-class cell therapy to help many patients,” added Kite’s CEO Christi Shaw.

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