Dive Brief:

• Bayer has acquired rights from Atara Biotherapeutics to two experimental cell therapies the biotech has been developing for solid tumours, including mesothelioma and non-small cell lung cancer.

• The German healthcare conglomerate will pay Atara $60 million to start the alliance, which centers around a personalized cell therapy and an “off the shelf” version of the treatment. Bayer gets a non-exclusive right to negotiate deals for additional Atara CAR-T programs as well and could shell out a further $610 million in conditional payments.

• The alliance marks the latest step in an attempt by Bayer to establish itself as a player in the emerging fields of gene and cell therapy. The company’s cell therapy interests, so far, appear focused on solid tumours and off-the-shelf approaches — two areas that would broaden the reach of CAR-T therapies, which are approved for a few blood cancers and have faced difficulties commercially

Dive Insight:

The first generation of CAR-T cell therapies, led by products from Novartis and Gilead, can treat a small group of blood cancers quite effectively. But they’re hampered by a cumbersome manufacturing process that takes about two weeks to complete. Treatment is only available at specific centers, further limiting use.

Two key improvements, however, could help CAR-T become more than a niche product. One is success in solid tumours, which account for some of the most commonly diagnosed cancers. The other is making treatment easier to administer, either by shortening the time needed to make a CAR-T product or by proving a more convenient “off-the-shelf” approach can be just as effective.

Success on either point has proved difficult. Solid tumours are heterogeneous and it’s tough to find the right targets to genetically modify immune cells to attack. Off-the-shelf treatments haven’t yet proven they’re as effective or long-lasting as their autologous rivals, though several programs from companies like Allogene Therapeutics, Fate Therapeutics, and others have produced encouraging, albeit early, clinical results.

Yet both points are in focus for Bayer’s gene and cell therapy business, which has increasingly become a source of dealmaking for the German firm.

Bayer has partnered with life sciences investor Versant Ventures to help form multiple gene and cell therapy-focused startups since 2013, and later acquired one of them, Bluerock Therapeutics. That deal gave Bayer a way to make off-the-shelf treatments based on stem cells from donors, and it’s building on that effort with the Atara deal. (Bayer recently acquired gene therapy developer Asklepios Biopharmaceuticals for $2 billion as well.)

Atara is developing a variety of different cell therapies for viral diseases, autoimmune disorders and cancer. Its most advanced program, for a type of infection that occurs after a rare complication from organ or stem cell transplants, produced positive interim results in a Phase 3 trial in November. An immunotherapy for multiple sclerosis has also shown early, positive signs.

The programs Bayer is licensing are meant to treat multiple solid tumours by targeting a protein called mesothelin, which is found on the surface of mesothelial cells that line the lungs, heart and other internal organs and is overexpressed in several cancers.

Atara acquired the programs via though a collaboration with Memorial Sloan Kettering Cancer Center, which has been testing the autologous treatment in mesothelioma patients. A Phase 1 study began in October. The deal also includes an off-the-shelf version of the treatment in preclinical testing.

While the licensing terms, including a $60 million initial payment, are “modest,” the alliance “adds validation” from a large company that should help speed development, wrote Jefferies, analyst, Maury Raycroft in a note to investors.

Atara shares climbed by as much as 14% in early trading Monday on the news.