The deal – which is a share exchange agreement – will see Orgenesis gain control of Masthercell’s manufacturing facility in Gosselies, Belgium which will be key to the US firm’s development plans according to CEO, Vered Caplan.
“It allows us to accelerate the transition of our lead product, Autologous Insulin Producing Cells (AIPCs) being developed as a therapeutic for Type 1 Diabetes, from pre-clinical testing into clinical trials.”
Masthercell has been working to scale up Orgenesis’s cell therapy candidate since last year and the takeover will deepen the US firm’s involvement in the production process and provide “cost of goods efficiencies” according to Caplan.
Buying Masthercell will also help Orgenesis diversify its business according to Caplan, who said that: “We are creating a vertically integrated company that will deliver more end-user value and generate a stronger financial position for our overall business.
“Both businesses will remain operationally independent, but will become strategically aligned in ways that maximize technical, financial and management synergies” Caplan said, adding that Masthercell will operate as a contract manufacturing organisation (CMO).
Orgenesis originally planned to set up a manufacturing facility in collbaortation with ATMI in 2013, however this facility did not materialise after Pall acquired ATMI's bioreactor business later that year.
Post-Dendreon strategy
Orgenesis’s diabetes treatment involves autologous cell replacement where cells harvested from the patient through a liver biopsy are used to produce insulin producing cells that are then transplanted back into the patient.
Orgenesis’s production procedure is analogous to the one Dendreon uses to make its prostate cancer treatment Provenge, which is perhaps another motivation for the Masthercell takeover.
Dendreon’s approach was to set up several manufacturing sites in the US and it planned build another in Germany. However, lower than expected sales coupled with high costs forced the firm to cut capacity and outsource production in Europe.
These efforts proved unsuccessful and Dendreon was eventually acquired by Valeant Pharmaceuticals.
Orgenesis’s emphasis on the Masthercell acquisition’s impact on the cost of goods and diversification of its revenue base through the addition of a services business suggests that the firm is keen to avoid the setbacks that befell Dendreon.