Sangamo Looks to Expand into CAR-Treg Cell Therapies with TxCell Acquisition

Sangamo Therapeutics has agreed to acquire TxCell for €72 million ($84 million), the companies said today, in a deal designed to position the buyer as a leader in the development of chimeric antigen receptor-modified regulatory T-cell (CAR-Treg) cell therapies for immunological diseases.

The planned acquisition, according to Sangamo, would accelerate the advancement of a CAR-Treg therapy into clinical development by combining its ex vivo gene editing capabilities with TxCell's Treg expertise.

“We believe CAR-Treg therapies will prove to be as exciting for immunology as CAR-T has been for oncology,” Sangamo CEO Sandy Macrae said in a statement.

The company said it plans to evaluate the potential of CAR-Treg therapies to prevent graft rejection in solid organ transplant and for the treatment of autoimmune diseases such as Crohn's disease and multiple sclerosis.

Sangamo cited preclinical research which has provided proof of concept that antigen-specific CAR-Tregs can deliver potent immunosuppression locally to targeted tissues—in contract to the global, nonspecific immune suppression associated with current anti-TNF alpha small molecule and monoclonal antibody drugs.

During 2019, Sangamo expects to submit a clinical trial authorization application in Europe for TxCell's lead product candidate TX200, which would be the first CAR-Treg investigational product candidate for solid organ transplant, as well as to launch a Phase I/II clinical trial later in the year.

Sangamo also said it intends to use its zinc finger nuclease (ZFN) gene-editing technology platform to develop next-generation autologous and allogeneic CAR-Treg cell therapies for treating autoimmune diseases. ZFN is now being used by Kite, a Gilead company, in a potentially $3.16 billion-plus global oncology cell therapy collaboration launched in February.

Searching for a Partner as Cash Dwindled

“We are excited to combine with Sangamo for their experience and technical expertise in gene-edited cell therapy, and we believe Sangamo's ZFN editing technology will facilitate the precise genetic modifications needed to create a new class of Treg-based antigen and tissue specific immunosuppressive medicines,” added TxCell CEO Stephane Boissel. “Progressing such CAR-Treg products in clinical development and towards commercialization would require expertise and financial resources that were impossible for us to get as a stand-alone business at a reasonable cost.”

On Thursday, TxCell disclosed that it had only €4.4 million (about $5.2 million) in cash and cash equivalents—down from the €8.7 million ($10.2 million) it reported as of June 30, 2017—adding that it was “actively working towards securing a longer-term financing solution, such as a strategic partnership and/or an equity offering, depending on market conditions.”

The search for that partner began earlier this year, TxCell stated in a presentation to investors today.

Sangamo plans to acquire a 53% majority stake in TxCell, then file a simplified cash tender offer to purchase all outstanding ordinary shares of TxCell for €2.58 ($3.02) per share in cash, on a debt-free and cash-free basis.

Shares of TxCell more than doubled this morning in trading on the Euronext Paris exchange, leaping 149% to €2.32 ($2.72) as of 8:36 a.m. ET, from €0.93 at the closing of trading on Friday.

Upon obtaining at least 95% of the share capital and voting rights of TxCell after completing the simplified tender offer, Sangamo would launch a “squeeze-out” procedure forcing minority shareholders to sell their stock for cash. Once the squeeze-out is completed, Sangamo intends to delist TxCell, which will operate as a subsidiary of Sangamo under the name Sangamo Therapeutics SA.

TxCell's operations will remain based in Valbonne, France.

Sangamo said it expects to complete the transaction in the fourth quarter, subject to satisfying closing conditions that include compliance with regulations governing foreign investments in France.