NEWSLETTER VOL. 6
AGT’s progress over the first half of 2018 has been tremendous: six patents granted, major advances in all of its key projects: HIV, PKU and immuno-oncology, substantial momentum on social media with constant activity and announcements to thousands of followers, and huge growth in business development activities through outreach, events, and tradeshows.
2018 began with the annual JP Morgan Healthcare Conference (JPM) in San Francisco. Meetings kept four AGT representatives busy for the four days of the event, and included one-on-one meetings with large Pharma companies, biopharmaceuticals, and institutional investors. The fires AGT lit at JPM paid off at BIO International Convention 2018, June in Boston, where Merck brought five infectious disease specialists in to discuss AGT’s HIV cure, and Johnson & Johnson’s Senior Director of Scientific Innovation, Infectious Diseases and Vaccines called us afterwards to set up a teleconference after hearing about AGT at a BIO 2018 party and networking event. Takeda showed intense interest in AGT’s gamma delta T cell patents in a meeting in their suite, and several VCs arranged follow-up calls after initial meetings at the show.
Estimated valuation of the company’s projects and IP also grew substantially. In January 2018, a report from Snell & Wilmer placed a value of $1.7 billion on AGT’s intellectual property. Just this month, AGT received a revised estimate of $2.41 billion due to additional patent family filings, progress on the HIV cure project, and several patent grants in immuno-oncology and HIV.
AGT is becoming the “it” company in Maryland and almost universally recognized by all key opinion leaders, industry executives, and government agencies within the state and surrounding areas, and AGT’s brand is beginning to be well-known nationally through superior technology, compelling data, and highly-effective marketing and business strategies.
In early June, Maryland’s Secretary of Commerce brought nearly his entire team for a two-hour sit-down with AGT’s executives to learn about gene and cell therapy, and discuss the potential economic impact on Maryland. Later in the month, Maryland’s U.S. Senator Chris Van Hollen made a similar visit to AGT. The Senator was impressed with AGT, as well as the gene and cell therapy industry’s ability to make a substantial national economic impact (watch a short video of his visit).
The HIV project is on track for IND submission this year, and beginning of human trials in the first quarter of 2019. The cell process protocol was locked earlier this year, and the most recent run yielded three to five times the number of HIV T cells theoretically necessary to create full immunity for an HIV-infected individual. AGT’s confidence is high that it will soon establish first human efficacy in its HIV cure product.
Overall, momentum is high at AGT and we are looking towards additional significant milestones in the remainder of 2018 that continue to drive us towards clinical endpoints and liquidity options.
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Granted Patents Protect AGT Ownership of Gamma Delta T Cell Stimulation and Secure the HIV Asset for Partnering and Commercialization
AGT has also received notice from the USPTO of the allowance and grants of four additional patents in immuno-oncology and HIV. More details will be published in the next newsletter.
GAMMA DELTA T CELLS ARE “HOT”
AGT’s Approach May Currently Be The Most Advanced and Powerful Immuno-Oncology Asset in the Pharmaceutical Industry
AGT’s patents for the stimulation of gamma delta T cells to kill solid epithelial cancer tumors (starting with liver cancer), makes AGT a rising leader in immuno-oncology. AGT saw consistent excitement for this technology in every presentation at JPM and BIO. It was particularly clear at AGT’s meeting with Takeda that they were a little dismayed that they had not found AGT before they put $100 million into gamma delta research at a UK company (Gamma Delta Therapeutics). They assured AGT that they are still interested in additional collaborations in this area, and AGT is continuing its talks with Takeda.
Would you like to understand more about AGT’s gamma delta approach for immuno-oncology? Watch these videos:
Jeff Galvin, CEO at American Gene Technologies, explains AGT’s method on fighting cancer.
CEO Jeff Galvin explains the power behind AGT’s cancer research and its groundbreaking discoveries.
In an effort to share AGT’s novel immune stimulating, immuno-oncology approach to kill cancer with the research community, Dr. David Pauza, AGT’s Chief Science Officer, and his team co-wrote and published the article “Gamma Delta T cell Therapy for Cancer: It is Good to be Local” in Frontiers in Immunology.
Gamma Delta T Cell Therapy for Cancer: It Is Good to be Local
AGT’s patented Immuno-Tox™ viral vector is delivered to tumor cells that in turn, increase the activation of gamma delta T cells that are part of the body’s natural defense against cancer. By driving the natural mechanism for cancer control, AGT creates a potent force for combating malignant diseases and preserve the exquisite safety of gamma delta T cells that do not attack normal tissues. The company is actively conducting studies in its laboratories to produce this immuno-oncology cell therapy for a future clinical trial IND submission. Animal tests show early efficacy in liver, breast, and prostate cancers; laboratory tests indicate the approach will be useful for a much larger number of tumors including many of the most feared forms of cancer. For more technical detail about Immuno-Tox™, click here. To read a press release regarding the patented technology, click here. Watch out cancer, here comes AGT!
PROGRESS ON THE HIV CURE
AGT’s lead collaborator for our HIV Cure program, Dr. Robert Redfield, was appointed as Director for the Centers of Disease Control and Prevention (CDC). Dr. Redfield has served as an advisor to AGT since 2011, becoming chair of the Clinical Advisory Board for AGT’s HIV Cure Program, and helping to accelerate its AGT 103 T-cell product toward IND submission. Although Dr. Redfield was required to step down from his AGT position to become the Director of the CDC, his influence remains in the “dream team” of HIV experts he helped to assemble around AGT’s HIV Cure project. Dr. Redfield’s appointment to head the United States’ leading health agency is a credit to the caliber of the teams that he has consistently formed and directed throughout his long and accomplished career. AGT is honored (and has benefited from) being one of the important projects to which he has dedicated his time and creativity.
The project Dr. Redfield helped guide and grow over these past five years is going well and swiftly approaching the critical milestone of human trials.
The cell process protocol was locked in January with results that exceeded AGT’s high expectations! The eighth pilot run on HIV-infected blood from patient volunteers yielded data that convinced AGT that its therapeutic has a high-probability of succeeding in making patients permanently immune to HIV. Further examination of the final blood product and the completion of tests on the levels of viral reservoir after processing revealed additional confirming data, and a discovery that will have value in a wide variety of infectious diseases. This discovery should yield AGT additional enabling and blocking intellectual property (IP) that will broaden AGT’s infectious disease (ID) platform beyond HIV, into other chronic viral infections. Because of the novelty of this discovery, AGT needs to keep the details confidential until appropriate patents have been filed (in the next few months). This should lead to a co-authored article in the fall that should excite the scientific community.
The IND is currently on track to be completed this year. Human trials should be able to begin early in 2019, with data posting shortly thereafter in the first half of 2019.
NEW VALUATION REPORT: $2.4 BILLION!
AGT’s estimated asset value has increased substantially over the last six months…
About two years ago, AGT began commissioning a “valuation comparables” analysis on AGT’s intellectual property (IP) including project status and its patent portfolio. The analysis compares AGT’s biotech assets to other companies that have sold their assets in M&A deals within the industry, and makes an estimate of what AGT could receive in a deal with a suitable partner in an acquisition. This is similar to getting a home appraisal in anticipation of a sale, or as a qualification for a loan. Of course homes are easier to estimate because of the huge number of transactions that occur each year within each region of the country. Deal valuations are less certain because of the wide variety of biotech assets that may be transacted, and the smaller number of deals that are made and documented publicly, but valuation reports are useful as a benchmark of growth and an approximation of value over time and under optimum market conditions. That said, it is not unusual for valuation estimates to be significantly different from the actual revenue or value captured in an M&A transaction. AGT feels that a variance of +/- 50% is a reasonable allowance in thinking about these estimates.
That said, there is reason to be excited about AGT’s valuations over these past two years:
(The chart above is calculated with a undiluted share base of 40 million shares outstanding with investors.)
The latest valuation report speculates that AGT’s assets would have a 50% value in a quick sale (i.e. unfavorable conditions requiring a substantial discount to create a transaction). By that measure, AGT’s current assets might retrieve $30 per share in an M&A transaction, which would constitute a substantial uptick from AGT’s valuation in the current funding round. A highly conservative “break up” value of the IP would be a discount of 80% from the estimated valuation, which would still yield a value of approximately $12.50 per share.
Although AGT is a private company, so there is not a public market for AGT stock, the progress in AGT’s IP valuation reports should give current shareholders confidence that AGT is building value over time in the biotech market, and maintains a good possibility of reaching a positive liquidity event for investors!
As a rising multi-trillion dollar industry, “Gene Therapy is Nearing a Major Breakthrough” according to Barron’s. The industry market is heating up with the recent gene therapy biotech company acquisitions by Pharmaceutical companies seeking gene and cell therapeutics in clinical trials or with recent FDA approvals.
In response to activities in gene and cell therapy—such as last year’s FDA approvals of Kymriah (Novartis), Yescarta (Kite Pharma/Gilead), and Luxturna (Spark Therapeutics)—the FDA Commissioner Scott Gottlieb, M.D. has said “…gene therapy represents a whole new paradigm in treating cancer… (Read his full testimony).
In addition to the excitement for gene therapy that was generated when Gilead bought Kite Pharma for $11.9 Billion, the more recent industry buyouts give a benchmark for AGT as it makes progress toward its planned clinical trial(s). The following provides a list of notable activities happening in the cell and gene therapy market.
M&As during Q1 2018:
- Novartis acquires clinical-stage AveXis Inc (AVXS) for $8.7 Billion cash (read press release). AveXis lead gene therapy candidate for spinal muscular atrophy (SMA) could add to Novartis’s neurodegenerative disease treatment portfolio
- Novartis licenses Spark Therapeutics Luxterna Gene Therapy in all markets outside the U.S. (read press release)
- GlaxoSmithKline transfers gene therapy portfolio to Orchard Therapeutics while maintaining a 19.9% equity stake (read press release)
- Celgene acquires Juno Therapeutics for $10 Billion, adding a CAR-T therapy to its pipeline (read press release)
- Celgene may purchase Impact Biomedicines for 1.1 Billion, according to the Wall Street Journal (read article here)
- Alexion Pharmaceuticals, Inc., owner of blockbuster drug Soliris, acquires Wilson Therapeutics for $855 Million in order to add a Phase III clinical-stage candidate to its pipeline to treat the rare genetic disorder Wilson disease (read press release)
- Sanofi purchased BioVerativ for 11.6 Billion to strengthen its hemophilia and rare blood disorder pipeline (read press release) and beats Novo Nordisk to buy Ablynx for $4.8 Billion (read article)
Possible M&As during Q2-Q3 2018:
- Takeda of Japan confirmed its intention to integrate Shire of Irish into its portfolio to boost its core therapeutic areas (read press release)
- There is some speculation that Agios Pharmaceuticals could be bought this 2018, as a result of its recent FDA approval for its therapeutic Idhifa (read about the approval). Agios’ is currently under FDA review for its therapy Ivosidenib to treat relapsed-refractory Accurate Myeloid Leukemia (AML)
- BioMarin could see bids from Sanofi, Roche, Amgen, Gilead this year as they are expecting their second FDA approval this year for the drug Pegvaliase for PKU (read an article about it)
AGT is growing its outreach and engagement with the press. One of its recent press releases was read and used by two national publications (among others) for its stories. AGT formally congratulated its former HIV cure collaborator Dr. Robert Redfield, M.D., on his new position as Director of the CDC in its press release here. Following AGT’s press release, the Wall Street Journal (WSJ) and Washington Post mentioned AGT in its articles regarding Dr. Redfield’s new assignment:
- Wall Street Journal – "New CDC Chief Resigned From Four Entities to Comply With Ethics Rules"
- Washington Post – "New CDC Chief Stepped Down From Four Groups to Comply With Ethics Rules"
During Q1 2018, AGT has additionally released or appeared in the following press releases:
- GlobeNewswire – American Gene Technologies Announces Progress toward Phase I Clinical Trial of AGT103-T for HIV cure
- ARM State of the Industry at JP Morgan: Arm State Of The Industry Briefing At JP Morgan Healthcare Conference 2018
- BioWord: BioWorld Reports American Gene Technologies’s Progress Toward an HIV cure
- GlobalNewswire: American Gene Technologies Gains Additional Immuno-Oncology Patent
- CityBizList: Jeff Galvin, AGT CEO, interviewed by Guy Flynn (DLA/Piper Partner) for CityBizList on AGT history, technology and progress
AGT leadership expanded its public engagement and opened its doors during the first quarter of 2018 by sharing its novel research and pre-clinical discoveries at biohealth, regenerative medicine, and immune-oncology events and conferences. The company has made an important shift this quarter from being an event recipient to a host for the purpose of growing public enthusiasm and participation in Maryland’s biotech industry.
To make a stronger public impact, AGT has partnered with Maryland companies and national associations to co-host events, such as TEDCO,Biobuzz, and Association of Women in Science. It welcomes partners to engage AGT with new event ideas it can participate or co-host (for details, send an email). Some of the events where AGT leadership spoke or AGT hosted at its headquarters this quarter, include the following:
U.S. Senator Chris Van Hollen Toured AGT, AGT Headquarters
Maryland Secretary Gill and Department of Commerce Meet with AGT,
2018 SAPA-DC Scientific Symposium,
Morgan Lewis Quarterly Event,
Law360 Article Published,
Featuring Jeff Galvin and American Gene Technologies
Chinese Biopharmaceutical Association, CBA 23rd Annual Conference,
BIO International Convention 2018,
MD Tech Council Industry Awards,
CEO Jeff Galvin gave a mentoring session to sponsored students at Georgetown University.
CEO Jeff Galvin & Clinical Affairs Dir. Irene Tennant presented “Build a Career in Biotech” at AGT
CEO Jeff Galvin and CFO Neil Lyons attended the conference to build awareness about AGT amongst the Bio financial and investor community
CEO Jeff Galvin participated in a panel Immuno-Oncology CEOs Bill Hearl (Immunomic) and Paul Tumeh (BioGraph 55)
CEO Jeff Galvin, CSO David Pauza, and CFO Neil Lyons attended the conference to build national interest and relationships in AGT
CEO Jeff Galvin started weekly VIP Lunch and Learn events to boost community partnerships and knowledge about AGT.
Cavendish Global BioHealth Impact Forum, Chicago
BioTalk Podcast w/Jeff Galvin and Rich Bendis
Maryland Association of Counties
Bio+Tech18 Conference / Maryland Tech Council
Cell & Gene Meeting on the Mesa
AGT has a few special announcements to share. The company is getting a new look that matches its innovative science. AGT has launched a new corporate identity package (color palette, presentation theme, and more). It’s also on its way to launching a new website and social media identity that will allow the public to make a personal connection to AGT. This new look focuses on making AGT’s research easy for the public to understand, and its simple, clean graphic elements make it more approachable and public-forward. For a sneak-peak of this new identity, see below:
AGT is part of a broader community that is creating change in the Maryland biotech region. Together with AGT, this community is building a stronger footing in the state and the nation. The following highlights a few of AGT’s biotech partners and their initiatives:
Cancer Support Community (CSC) has named CEO Jeff Galvin to its Board of Directors. CSC ensures all people impacted by cancer are empowered by knowledge, strengthened by action, and sustained by community. It disseminates information to educate the public about the latest resources in cancer treatment: immunotherapy. To read more, click here.
BioHealth Innovation, Inc. (BHI) works to accelerate biohealth commercialization in MD, DC, VA by providing SBIR funding, business, technical and international soft landing assistance, as well as connections to innovation center space, workforce, capital, promotion, and other business growth resources. For more information, click here.
Frederick Community College Biotech Degree Program students have interned, received industry training, and published in scholarly journals this year. Maryland biotech community’s support was instrumental: “15 students enrolled in 2017-2018’s cohort have been hired at local Maryland biotech companies…We all succeed together by leveraging each other to do great things!” Dr. Judy Staveley Program Manager/Assistant Professor.