A UK biotech company has raised $130mn in order to purchase manufacturing facilities and teams of experts from cash-strapped gene and cell therapy start-ups. This group is capitalising on the sale-offs that have occurred within the sector.
Ascend is addressing a capacity bottleneck which slows down treatments reaching patients. They provide expertise in manufacturing the difficult to make products, and also help with the increased regulatory scrutiny on the quality of therapies.
The company was founded at the beginning of the year by Monograph Capital, a specialist venture capital firm. It has already acquired a Potters Bar facility from Cancer Research UK as well as the German manufacturing division of Freeline Therapeutics and a San Francisco design team.
Biotech markets have fallen after a glut early-stage companies went public between 2020 and 2021. The S&P XBI Index of smaller biotech firms is down 50% since its peak in February of 2021.
Signing royalty licensing agreements and forming partnerships with Big Pharma are ways that smaller biotech groups can stretch their money until they raise more. They are also reducing staff and trying to find ways to profit from their assets.
As the public market remains closed for loss-making biotechs Ascend will purchase their facilities and offer funding to those who make complex drugs to treat rare diseases or cancer.
Fred Cohen, chairman of Ascend said that capital expenditures were becoming a major issue for these businesses. When money was plentiful four years ago, nobody worried about investing $35mn in the manufacturing business. But now, they’re no longer in money paradise.
In the UK, cell and gene therapy production is expanding in other companies such as Oxford BioMedica (which helped produce the Oxford/AstraZeneca Covid-19 vaccination), Catalent, a large contract manufacturer, and Fujifilm Diosynth Biotechnologies.
Bali Muralidhar is the chief investment officer at Abingworth, a VC which co-led this funding round. He said that European companies who do not have their own manufacturing tend to wait longer than their American counterparts.
Muralidhar stated that the Potters Bar location, located in the heart of the Golden Triangle for Life Sciences, between Oxford and Cambridge, could boost the UK’s Cell and Gene Therapy industry.
We don’t have any major gene therapy manufacturing facilities in the UK at this time. He said, “I think Ascend is capable of doing that.”
Ascend believes that by specializing in the production of these therapies, it can reduce costs. The company believes that some therapies can cost up to $200,000 in order to be produced. This presents a significant opportunity to reduce costs and broaden the types of diseases that are targeted.
“If we are able to deliver five- or tenfold improvements in the near-future, this will change the game dramatically for therapeutic developers,” stated Freddie Dear. Vice-president, corporate development, Ascend.
Ascend received early-stage funding in New York in a round led by Abingworth and Petrichor, and including funds from 4Bio Capital and DCVC Bio.
Recently, the company hired a new CEO to oversee the acquisition spree in order to create a manufacturer of innovative treatments. Mike Stella, the former chief executive officer of Cognate BioServices was acquired by Charles River Laboratories in 2021 for its expertise in manufacturing cell and gene therapies.