Deal of the year: Cell Design Labs

Cell Design Labs, a biotherapeutics spinout of University of California, San Francisco (UCSF), made headlines in June 2016 when it revealed a $34.4m funding round backed by Kite Pharma, itself an immunotherapy spinout of University of California, Los Angeles (UCLA).

The round was led by VC firm Kleiner Perkins Caufield Byers, while spinout-focused investment firm Osage University Partners and venture capital firm Mission Bay Capital also contributed.

Cell Design Labs and Kite Pharma at the same time revealed they were forming a strategic partnership. Kite, which is genetically engineering T-cells to recognise and eliminate tumours, has partnered Cell Design to develop “on/off switches” for Kite’s chimeric antigen receptor (CAR) T-cells.

Kite received exclusive worldwide rights to develop and commercialise CAR T-cell therapies containing Cell Design’s “on/off switches” to treat acute myeloid leukaemia as well as an exclusive option for products targeting B-cell malignancies.

Cell Design Labs, spun out of UCSF in 2015, is commercialising research undertaken in the laboratory of co-founder Wendell Lim, professor and chair of the Department of Cellular and Molecular Pharmacology.

The company uses human cell engineering technology to develop treatments for several cancers, including hematologic cancer and solid tumours. Long-term, the spinout hopes to use the same technology to fight conditions such as autoimmune and degenerative disorders.

Cell Design Labs is part of a wave of spinouts targeting cancer, many of them aiming to exploit T-cells – a part of the body’s immune system – to tackle a disease that is a leading cause for death in the world.

Big pharmaceutical companies are working on their own take of the T-cell approach, though immunotherapy’s lure can be treacherous. When Bristol Myers-Squibb decided to widen the potential usage of its Opdivo drug last year, it launched a clinical trial that ultimately failed and wiped $21bn off of the company’s market value in August.

But Cell Design Labs is in good company when it comes to spinouts as well: in the past year alone, businesses emerging out of institutions as varied as Albert Einstein College of Medicine, Pittsburgh University, Rockefeller University and University Medical Centre Utrecht have raised capital to develop their take on immunotherapy.

And the phenomenon goes back further: Juno Therapeutics collected $310m over two rounds in 2013 and 2014 before floating on Nasdaq in early 2015 to great fanfare – and soaring stocks.

Will Cell Design Labs eventually reach those same heights? The GUV Award for Deal of the Year is partially in recognition of its vast potential. Crucially, the award also recognises the impact that the collaboration with Kite Pharma should have and shines a light on the kind of deal that remains a rarity in the university venturing world: one spinout returning to invest in and work with another one.

Wendell Lim described Cell Design Labs thus: “We believe this disruptive and versatile technology can be customised to defeat many complex diseases – diseases that currently have no, or limited, therapeutic options.

“Using our proprietary cell control modules to create the next-generation of novel therapies is intellectually compelling and deeply satisfying in its potential to change the way medicine is practiced.”

Fred Cohen, co-founder and chairman of the board of Cell Design Labs, added: “At its core we are programming a living cell to identify a specific threat and neutralise it without harming adjacent tissues.

“Utilising the innovative research of Wendell Lim we are harnessing the natural power of the immune system using modular cellular programming to create living therapies, initially for cancer, but ultimately for a range of diseases.”