June 12, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Investors and analysts are speculating that ZIOPHARM Oncology, Inc., located in Boston, may soon be a takeout target, though a list of potential buyers has yet to emerge.
The small company, which currently employs 27 people, is focused on the currently hot area of immuno-oncology, including chimeric antigen receptor T cell (CAR-T) technology. On March 30, 2015, the company, along with Intrexon Corporation, announced a global collaboration deal with Merck Serono, the biopharmaceutical division of Merck KgaA in Darmstadt, Germany, to focus on CAR-T products.
Merck Serono will choose two CAR-T targets and provide research funding. ZIOPHARM will be responsible for additional research and development funding. If and when the candidates reach investigational new drug (IND) stage, the programs will shift to Merck Serono for clinical development and commercialization.
Other companies working with CAR-T therapies include Novartis AG , Juno Therapeutics and Kite Pharma, Inc. . Any company looking to get into the CAR-T game might be interested in buying Ziopharm.
The technology itself involves taking particular white cells from the body, T cells, attaching a fragment of an antibody that recognizes and targets specific cancer cells, and reinfusing them back into the patient. It works by re-programming the patient’s immune system to attack tumor cells, and has been shown to be effective and fairly safe against blood cancers like leukemias and lymphomas.
However, in April 2015 Novartis presented data of a Phase I study of six patients on CAR-T therapy for solid tumors—ovarian cancer, pancreatic cancer and mesothelioma. The results indicated safety, but disappointing results. The stock market responded with jitters for Novartis, Juno and Ziopharm.
So why do some investors think Ziopharm’s ahead of the game?
Despite inconsistent progress, biopharma is still optimistic about CAR-T therapies. About a year ago, in July 2014, Ziopharm released information about what it was working on, which was the CAR-T therapy, but with Intrexon believed they had automated the synthetic gene-making process, which would solve some manufacturing challenges.
More to the point, the two companies have developed something called the RheoSwitch Therapeutic System. Essentially CAR-T therapeutic remains inactive in the body until the patient takes a pill that switches it on. The patient would keep taking the pills as long as there were no toxic side effects, but as soon as side effects occurred, they could stop taking the RheoSwitch pill and the CAR-T therapy would switch off.
A more common approach is a “suicide gene,” that can shut the drug down.
In addition, Ziopharm recently announced that Lawrence Cooper, a professor at the University of Texas MD Anderson Cancer Center, would be heading the company as chief executive officer. This occurred right around the time that Randal Kirk, chairman and chief executive officer of Intrexon, planned to distribute all its shares of Ziopharm to its investors. When asked why, Kirk was quoted in the Boston Business Journal article by Don Seiffert as saying, “there are other parties for whom a Ziopharm acquisition might be very attractive in the future… our dividending these shares to our shareholders actually would simplify any such transaction.”
Analysts have taken these bits of news and, at least in some cases, concluded that something big is going on at the company. Others suggest that there are a lot of investors out there with short interest in the company’s stock, who will profit if the company’s stock prices go down.
Alternately, the RheoSwitch technology is very interesting. In the Boston Business Journal articles, Joe Barton of Dallas-based White Rock Capital, said, “I would say that (Ziopharm) has the ability to control the genes and CAR-T cells in a way that will become the leading technology (for gene therapy). We believe the suite of technology, including the RheoSwitch, is going to be the operating system for controllable, reliable gene therapy.”
Barton also suggests that an acquisition could go for a high of $10 billion.
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