Mustang pares research, sells manufacturing plant to save money
18 May 2023
Cell TherapyGene TherapyAcquisition
Mustang Bio, a Massachusetts-based developer of cell and gene therapies, has decided to trim down its research programs and sell a manufacturing facility in an effort to both save and better allocate money.
The moves, disclosed Thursday, come on the heels of a historic public market downturn that has made fundraising far more difficult for small biotechnology companies. Those focused on cell and gene therapies, which are particularly expensive to research, develop and manufacture, have been hit especially hard. Since the start of the downturn, at least 20 have announced layoffs, narrowed research or pursued other cost-cutting measures.
Like many other biotechs, Mustang acknowledges there is “substantial doubt” about its ability to remain solvent, and notes that more funding will be needed for it to keep running. Mustang had $58 million in cash and cash equivalents at the end of the first quarter, a period during which the company also recorded a net operating loss of $16 million.
Mustang now estimates that its asset sale, research prioritization and recent loan repayments will reduce annual expenses by at least $28 million.
The company will also directly bring in money by selling its manufacturing plant to uBriGene Biosciences, which is the U.S. subsidiary of uBriGene Group, an organization that does contracted work for cell and gene therapy developers.
Deal terms hold that uBriGene will acquire the 27,000-square-foot facility in Worcester, Massachusetts, for $11 million. The sum includes a $6 million upfront payment and another $5 million payable once Mustang secures $10 million from equity raises after the deal’s close.
The companies also agreed to a manufacturing supply pact that takes effect once their initial deal closes. That agreement has uBriGene producing Mustang’s most advanced medicines, including MB-106, a cell therapy currently in early-stage human testing for two types of blood cancer.
Mustang said MB-106, another experimental therapy named MB-109, and certain so-called CAR-T cell therapies will be its primary research focus moving forward. The company plans to stop developing other CAR-T therapies targeting three proteins — “HER2,” “CS1” and “PSCA” — tied to various cancers. It’s also discontinuing work on a treatment called MB-102, which had been tested in patients with a rare, aggressive cancer that affects the blood and bone marrow.
Additionally, Mustang said enrollment has been paused in clinical trials evaluating a gene therapy for a rare disorder known as XSCID that’s being developed in partnership with St. Jude Children’s Research Hospital.
Mustang explained that it’s waiting for data from new trials St. Jude is planning, which will test a “modified version” of the current virus used to shuttle the gene therapy’s medicinal payload into cells. Mustang noted the decision to delay initiating its own studies was not due to any safety concerns, but rather one made “out of an abundance of caution.”
“[O]nce we have had the opportunity to review the emerging data from the planned trials utilizing the modified vector, Mustang expects to provide more information on timelines,” the company said.
Mustang added that the delay will reduce its near-term operating expenses.
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