ORN-252

Eli Lilly is going big on in vivo CAR-T therapy. The company said Monday that it would buy Kelonia Therapeutics, which has a Phase 1 program for multiple myeloma and a couple of preclinical candidates, in a deal worth up to $7 billion that includes $3.25 billion upfront. The deal is Lilly’s second for a biotech working on in vivo CAR-T, following its $2.4 billion cash bid for Orna Therapeutics in February. AbbVie’s acquisition of Capstan worth up to $2.1 billion was the previous record holder in deal size for this therapeutic approach. And there’s increasing competition. Other players include AbbVie, AstraZeneca , Bristol Myers Squibb and Gilead , all of which acquired in vivo cell therapy startups in deals cumulatively worth nearly $5 billion, including promised biobucks, last year. The terms of the Lilly-Kelonia deal provide for payments tied to certain clinical, regulatory and commercial milestones. The deal is likely a home run for Kelonia’s venture investors. Unlike many startups that have raised multiple $100 million-plus rounds, Kelonia only raised a total of $60 million in private capital, according to previous public announcements. One lead investor, Venrock, put in $20 million and will make $900 million back on the upfront payment. It could make as much as 100 times its investment on the milestone payments if they pay out, a spokesperson for the firm said. Traditional CAR-T involves removing T cells from a cancer patient, altering their genetic makeup so they recognize and destroy cancer cells, and then reinfusing them back into the patient. It can be highly effective in blood cancers, but is expensive, time-consuming and has production capacity limitations. In vivo CAR-T aims to alter the patients’ T cells inside the body. Delivery systems like lentiviral vectors or lipid nanoparticles are used to carry genetic instructions to T cells that weaponize them against cancer cells. The idea is that this is cheaper and simpler than the established approach, enabling many more patients to be treated. In a Monday note, BMO Capital Markets analysts cautioned that in vivo CAR-T remains “an unproven and risky area of development.” However, some investigational therapies have yielded hints of effectiveness. Kelonia’s lead program KLN-1010 works by generating anti-BCMA CAR-Ts within the patient. Early data from a first-in-human trial, codenamed inMMyCAR, came out at last year’s ASH meeting and showed that a single infusion eliminated detectable cancer cells in four heavily refractory multiple myeloma patients. The trial has so far been conducted in Australia, but will soon be expanded into the US after the FDA greenlit the study in January. Kelonia also has a CD19/BCMA biCAR approach that is yet to reach the clinic, and another preclinical program whose details it has not disclosed. Separately, Kelonia is working with Johnson & Johnson on in vivo CAR-T therapies under a deal signed in November. J&J will pick the targets, which were not disclosed. Kelonia also has a deal with Astellas. The Wall Street Journal reported the possibility of the Kelonia deal on Sunday. Ahead of the official announcement, the BMO Capital analysts said Monday that the deal would add a “complementary” in vivo approach to Lilly, and could eventually give the company a future source of durable growth beyond its metabolic franchise. Kelonia’s tech is different from Orna’s because its lead program, ORN-252, uses circular RNA to reprogram T cells to target CD19, and aims to treat B cell-driven cancers and autoimmune diseases. It is in a Phase 1 trial in healthy volunteers. “A deal to acquire Kelonia would reflect a clear strategic fit to Lilly’s core oncology and immunology franchises,” the BMO analysts wrote. They suggested that Lilly is making deals well ahead of the expiry of patents on its key medicines. Its bestsellers Mounjaro and Zepbound, for diabetes and obesity, respectively, brought in $36.5 billion in total last year — more than half the company’s total sales. The molecule they are both based on is expected to lose exclusivity in the mid-2030s. Editor’s note: Kyle LaHucik contributed reporting. Endpoints is fielding the next Biopharma Sentiment Index (BPSI) — a concise, three-minute survey that distills thousands of industry views into a clear quarterly benchmark. This year is pivotal for biopharma, and we need your perspective on where things are going. Take the survey here.