A UK biotech group has raised $130mn to buy up manufacturing facilities and expert teams from cash-strapped cell and gene therapy start-ups, capitalising on the sell-off in the sector.
Ascend is trying to address a significant capacity bottleneck that slows down the treatments getting to patients, providing expertise to manufacture the tricky to make products and help with increased regulatory scrutiny of the quality of the therapies.
The company, which was founded by specialist venture capital firm Monograph Capital at the start of last year, has already bought a Potters Bar site from Cancer Research UK, the German manufacturing business of Freeline Therapeutics, and a design team in San Francisco.
After a glut of early stage companies went public in 2020 and 2021, biotech markets have slumped, with the S&P XBI index of smaller biotech companies down 50 per cent since a peak in February 2021.
Smaller biotech groups are looking for ways to stretch their funds until they can raise more, signing partnerships with Big Pharma and royalty licensing deals. But they are also cutting staff and looking for ways to make money from their existing assets.
With the public markets remaining shut to lossmaking biotechs, Ascend will offer funds to the makers of complex drugs for rare diseases and cancer by purchasing their facilities.
Fred Cohen, chair of Ascend, said capital expenditure was becoming a real issue for these companies. “When money was free four years ago, no one was worried about spending $35mn to get into the [manufacturing] business, but now they are no longer in money heaven.”
Other companies, including Oxford BioMedica, which helped manufacture the Oxford/AstraZeneca Covid-19 vaccine, the large contract manufacturer Catalent and Fujifilm Diosynth Biotechnologies are expanding their production of cell and gene therapies in the UK.
Bali Muralidhar, chief investment officer of Abingworth, a VC that co-led the funding round, said European companies without their own manufacturing tended to face longer waits than their American counterparts.
Muralidhar said the Potters Bar site, situated at the centre of the so-called Golden Triangle for life sciences, between Oxford, Cambridge and London, could bolster the UK’s cell and gene therapy industry.
“We don’t really in the UK have a powerhouse of manufacturing gene therapies at the moment. I think Ascend can do that,” he said.
Ascend hopes that by specialising in manufacturing these therapies the company can bring down production costs. It believes that with some therapies costing $200,000 to produce, there is significant opportunity to cut costs and so broaden the kinds of diseases that can be targeted.
“If we can deliver in the near future five- or ten-fold improvements, that will really change the game for therapeutic developers,” said Freddie Dear, vice-president of corporate development at Ascend.
Ascend raised early stage funding in a round co-led by Abingworth and Petrichor in New York, and also included funds from 4Bio Capital and DCVC Bio.
The company recently hired a new chief executive to lead the acquisition spree to build a specialist maker of the innovative treatments. Mike Stella was the former chief business officer of Cognate BioServices, which Charles River Laboratories bought for its cell and gene therapy manufacturing expertise in an $875mn deal in 2021.
