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Gilead Bets on Cell Therapy Again with $567M Cell Design Labs Deal

Xconomy San Francisco — 

Gilead Sciences is deepening its capabilities in cell therapy with a deal valued at up to $567 million to acquire Cell Design Labs, a company that discovers and develops such treatments.

The announcement late Thursday comes a little more than four months after Foster City, CA-based Gilead (NASDAQ: GILD) jumped into cell therapy in a big way with its acquisition of Kite Pharma, a company that developed a type of cell therapy for cancer called CAR-T, which involves removing a patient’s T cells, engineering them to make them better cancer fighters, and infusing them back into the patient. Under Gilead, Kite went on to receive FDA approval in October for its CAR-T therapy axicabtagene ciloleucel (Yescarta), a treatment for non-Hodgkin lymphoma.

The Cell Design acquisition could expand Gilead’s cell therapy capabilities beyond cancer. Though Cell Design has been developing cancer treatments, Gilead says the startup’s technology has the potential to develop therapies for autoimmune and degenerative disorders. So far, all of Cell Design’s work is preclinical. The company’s lead preclinical compound targets multiple myeloma.

Under the terms of the deal, Gilead is acquiring all outstanding shares of Cell Design Labs, including the 12.2 percent stake Kite already owns, for up to $567 million. That price includes a $175 million upfront payment, and Cell Design shareholders could gain an additional $322 million if the company hits development and approval milestones.

Emeryville, CA-based Cell Design Labs is based on the research of University of California, San Francisco, scientist Wendell Lim. Last year, Lim told Xconomy that Cell Design could go further than CAR-T therapies by making genetic manipulations that change how T cells gather information about their surroundings and react to what’s around them. Kite Pharma was the company’s first partner, and was also an investor in the company. Besides Kite, Cell Design’s investors include Kleiner Perkins Caufield Byers, Osage Ventures, and Mission Bay Ventures.

Cell Design has two proprietary technology platforms, synNotch and Throttle. The company says that these technologies are able to engineer cells that are better able to recognize cancer, and in turn, spare healthy tissue.

Gilead says adding these technologies to Kite’s current research programs could lead to new therapies that treat a broader range of blood cancers and solid tumors, and potentially in a safer way. That’s significant because the Kite CAR-T, which was approved to treat cases of non-Hodgkin lymphoma in patients who had failed two other treatments, comes with the risk of an immune response called cytokine release syndrome, in which inflammatory proteins called cytokines are activated in the body. In the most severe cases, this side effect can cause death.

Here’s more on Cell Design’s technology and its approach to redesigning T cells.

Healthy T cell courtesy of Flickr user NIAID via a Creative Commons license.