NEW YORK – Orgenesis on Thursday announced a sixfold revenue increase in the second quarter compared to the same period in 2020, driven largely by the continued evolution of the cell and gene therapy market toward a standardized, automated, and decentralized manufacturing model, according to CEO Vered Caplan.
For Q2 2021, the company recorded revenues of $10.5 million compared to $1.7 million in the year-ago quarter. The growth was largely driven by lucrative contracts with joint venture partners who are on board with what the company is offering: custom point-of-care automation that is built into their cell therapies from the onset. Caplan indicated during a call to discuss financial results that she expects Orgenesis to continue to benefit since the current centralized manufacturing model for cell and gene therapies is not sustainable long term.
"It's really important to validate [cell therapy] automation together with the biology," Caplan said. "Many wonderful companies and hospitals develop great biology, but if they start doing clinical trials and complete the validation of the product and then you try to automate it late, it becomes yet another product and you have to revalidate it."
The cells in these therapies are often harvested from a patient's own immune system and are extremely sensitive, Caplan said, explaining that their behavior can differ when manipulated in an automated system versus a smaller, manually controlled system in a research lab. The firm partners with small biotechs and hospitals that have cell therapies in early development, in-licenses these products, and while the drugs are undergoing preclinical and clinical studies, works with the partners to develop automated, scalable development systems for their delivery.
Through this process, Orgenesis attempts to avoid the "now what?" moment that companies in the cell and gene therapy space often face once a product developed based on manual processes is poised for the market. Suddenly, they realize they won't meet the global demand of the product. This shift toward automation, the firm believes, can help lower the exorbitant costs of these therapies and mitigate access disparities.
Most of the cell and gene therapies that Orgenesis is developing are autologous and bespoke. They involve harvesting patients' own cells, modifying them to go after a cancer target, then reinfusing them into the patient. In recent years, these treatments — particularly autologous CAR T-cell therapies for advanced cancers — have demonstrated long-term benefit for patients with limited options, which in turn has bolstered their market demand.
But the current model, where developers validate these therapies in a manual way and then scale up manufacturing, usually in partnership with large, centralized contract development and manufacturing organizations, or CDMOs, isn't practical, efficient, or affordable. Patients' harvested cells, in many cases, must be frozen, shipped over long distances, thawed, manipulated, and expanded in a good manufacturing practice (GMP) facility, frozen again, and shipped back once again for reinfusion in the patient.
The process can take weeks that critically ill patients may not have and exposes the products to variables that can jeopardize their efficacy. Even if everything goes smoothly with complex transport and manufacturing logistics, the countless personnel and third-party vendors involved in the process rack up costs. Indeed, the first two CAR T-cell therapies on the market for cancer patients, tisagenlecleucel (Novartis' Kymriah) and axicabtagene ciloleucel (Gilead/Kite's Yescarta), cost upwards of $373,000 for a single infusion and take up to a month to go from leukapheresis (harvesting the patients' cells) to reinfusion.
Still, these therapies are considered the future of cancer immunotherapy because some patients with advanced cancers known to have notoriously poor prognosis, such as relapsed and refractory lymphomas and leukemias, have gone into long-term remissions. With growing demand, manufacturers are facing a host of bottlenecks and shortages. For example, there is currently a major shortage of viral vectors, a critical engineering component of cell therapy manufacturing, since the supply chain lags well behind demand.
Point-of-care solutions
Orgenesis, which is headquartered in Germantown, Maryland, with locations in Israel, Korea, and Belgium, has shifted its focus several times since becoming a publicly traded company in 2011. At first, it was singularly focused on diabetes cell therapies, then it fashioned itself into a CDMO following a 2015 acquisition of Masthercell, before arriving at its current business model and mission. The company sold Masthercell last year for $127 million after realizing that in the cell and gene therapy business, it was better not to rely on the centralized CDMO model.
Orgenesis' current business model involves its point-of-care platform, dubbed POCare, which includes three elements: POCare therapies, which are the in-licensed cell and gene therapies; POCare technologies, which are the closed, automated systems that Orgenesis builds and customizes for its licensing partners; and a global POCare Network, comprising biotechs, research institutes, and hospitals interested in standardized and automated cell therapy development.
While each licensing contract is different, many involve two-way financial benefit: Orgenesis pays to in-license therapies from partners, and the partners pay Orgenesis to help them develop these therapies in an automated way that ultimately bolsters their market availability and revenue potential.
"We have a twofold relationship with Orgenesis," said Gerhard Bauer, an oncologist and director of the GMP cell therapy facility at University of California, Davis, one of the partners in Orgenesis' POCare network. "First of all, we have a research agreement with them to develop additional methodologies to get to a better CAR T-cell product, and we at the GMP facility have a fee-for-service agreement to do everything necessary to get the CAR T-cells into the patient."
Additionally, when partners ink contracts with Orgenesis and become part of its network, they can tap into around 35 centers around the globe and run multicenter validation trials for their therapies. Partner centers can also offer their patients access to therapies being studied at other network facilities.
Once a treatment is commercialized within one of its partnerships, Orgenesis again stands to make money by regionally out-licensing the therapies that it previously in-licensed to members of its network. While Bauer declined to discuss the details of the cell therapies his team at UC Davis is working on, autologous CAR T-cell therapies are among the projects. Once the automated manufacturing system under development with Orgenesis is complete, he said he can share more details.
Several cell therapies in Orgenesis' pipeline are further in their development, including an autologous mesenchymal stem cell treatment Celyvir, in-licensed from Hospital Infantil Universitario Nino Jesus in Spain, which has completed Phase I/II trials for refractory solid tumors. There is also an anti-CD19 autologous CAR T-cell therapy, licensed from Kecellitics Biotech, that is currently in Phase I trials for patients with relapsed lymphoma.
Although this anti-CD19 CAR T-cell therapy for lymphoma would compete with Novartis and Gilead's marketed products, Caplan isn't too worried about having to demonstrate a therapeutic advantage over these established options. Even if the benefit of the treatment is about the same as the others, she believes the treatment's POCare approach would give it a leg up.
"At the end of the day, it doesn't have to be better than the existing therapies," Caplan said. "Even though we hope that will be the case, if we can just make it more available and more easily producible at a lower cost, we will have achieved our goal."
Accessibility through mobile units
Currently, many cell therapies are manufactured in clean rooms, which are specially designed to avoid contaminants but still require humans to enter them and perform manual steps. A closed system "clean box" alternative, Caplan said, presents a way to avoid this requirement and the variabilities that come with it.
A closed-system, automated cell therapy manufacturing process can be fully controlled from the outside. And once it is customized for a specific therapy, it can be replicated identically to ensure harmonization and standardization for that product's future output. This is crucial for ensuring the therapy's consistency, both in terms of patient benefit and regulatory evaluations.
These are the types of systems that Orgenesis is working to develop with partners like UC Davis. Orgenesis' ultimate goal with these automated, closed systems is to be able to bring them to hospitals in regions around the globe where patients, by virtue of location, have a tough time accessing cell therapies. As such, the company is pouring significant resources into developing what it calls OMPULs, short for "Orgenesis Mobile Processing Units and Labs," that are placed next to hospitals offering these autologous treatments and serve as their own on-demand manufacturing and support site.
"Since we time the automation to the biology, it's not just the concept of 'one-box-fits-all,'" Caplan said, explaining that Orgenesis doesn't just drop off an OMPUL at a hospital that wants to manufacture point-of-care cell therapies but develops it alongside the products so that the closed system automation is part of the product itself and is validated alongside the product, ultimately allowing regulators to evaluate the product in its scalable, automated form.
"Wherever we locate the OMPUL, whether it's in the parking lot or on the roof, that unit is now dedicated to that hospital and specific therapy, and allows them to get rid of all the very complex logistic and timing issues of trying to bring in products" from far away, Caplan said.
The OMPULs — like many of the cell therapies in Orgenesis' pipeline — are in the early validation stages. In response to a question during Orgenesis' Q2 earnings call about the number of OMPULs currently implemented, Caplan didn't provide a number and said that its partner research institutes were still validating the OMPULs. She added that the company's plan is to install OMPULs across an initial 35 cell and gene therapy centers globally.
"We really want to standardize these therapies so we can offer the same quality product in other countries," said UC Davis' Bauer, who said OMPULs are "part of the plan" for his own center's partnership with Orgenesis. "We are very lucky in the US to have such resources and treatments, but many other countries do not have such treatments. … What if a mobile unit could be brought to such countries?"