AdAlta boosts balance sheet, makes key advances in Q4 FY24

AdAlta entered collaboration with SYNthesis BioVentures Fund to establish AdCella during Q4 FY24
Cell Therapies chosen as preferred manufacturing partner for AdCella’s cellular immunotherapies
Institutional investment, reduced expenditure and exercise of options boost cash balance to $3.13m at end of quarter

Aussie biotech AdAlta strengthened its cash position and established key partnerships in Q4 FY24 as it advanced its “east to west” cellular immunotherapy for solid cancers strategy.

AdAlta (ASX:1AD) entered a collaboration with venture capital firm SYNthesis BioVentures Fund (SYNBV) to establish subsidiary AdCella Pty Ltd during Q4 FY24 and named Cell Therapies its preferred manufacturing partner for its cellular immunotherapies.

1AD also advanced partnering discussions for its subsidiary AdSolis Pty Ltd, which is undertaking development of its lead drug AD-214.

1AD’s cash balance as at the end of June 2024 was $3.13m, approximately double that at March 31.

The strengthened balance sheet was attributed to inflow improvements of $1.2m from a new flexible institutional investment of up to $3.7m along with $1.9m from the exercise of listed 1AD options and reduced expenditure following completion of the AD-214 Phase 1 clinical trial.

AdCella – ‘East to west’ cellular immunotherapies

1AD announced during the quarter it was collaborating with SYNBV to form AdCella, a jointly owned entity to facilitate entry of innovative cellular immunotherapies from Asia into Western regulated markets, leveraging AdAlta’s i-body technology.

AdCella will build out 1AD’s product development business and clinical stage pipeline by in-licensing assets that complement its i-body platform, used to discover, and develop next generation protein therapeutics.

1AD says Asia, and China in particular, is leading innovation in cellular therapies, with around half of all companies and 60% of all clinical trials found in Asia.

1AD is looking to capitalise on Australia’s specific and globally recognised expertise in cellular immunotherapy manufacturing and clinical trials.

AdCella aims to provide a pathway for clinic ready assets to access Western-regulated markets.

By partnering with AdCella, Asian companies will gain unique access to:

Australia’s cellular immunotherapy clinical and manufacturing ecosystem
1AD’s capabilities to conduct clinical trials acceptable to US FDA
1AD’s i-body platform for the next generation of multi-functional cellular immunotherapy products in their pipeline; and
Access to both public and private sources of capital.

In turn, Australian patients may benefit from earlier access to these new therapies than would otherwise be possible without AdCella.

1AD says by licensing or acquiring global (outside Asia) commercialisation rights to these products in return for conducting initial clinical trials for Western-regulated markets in Australia, the company could add significant value to these assets for both itself and licensing partners.

1AD will also make its i-body platform available to licensing partners to enhance their future pipelines, enabling the company to develop a pipeline of novel, multi-functional cellular immunotherapy products.

Manufacturing partnership with Cell Therapies

In May, 1AD further enhanced its AdCella venture by announcing it had inked a strategic deal designating Cell Therapies (CTPL) as the preferred manufacturing partner for its cellular immunotherapies.

The two companies have executed a master services agreement (MSA) with initial work anticipated to focus on technical feasibility assessments of 1AD’s in-licensing candidates.

CTPL is Australia’s leading contract manufacturer of cellular immunotherapies for clinical trials and commercial supply.

1AD says the MSA provides AdCella with access to deep experience in development and manufacturing of cellular immunotherapies and state-of-the-art facilities.

Partnering momentum continues for AD-214

1AD says partnering momentum continues to trend positively for its lead product AD-214, a first in class, next generation antibody therapeutic for the treatment of fibrotic diseases.

1AD’s priority is to finance progression of AD-214 into Phase 2 clinical studies in Idiopathic Pulmonary Fibrosis (IPF) or kidney fibrosis, through out-licensing or co-development partnerships with its AdSolis subsidiary.

The company’s executive team held roadshows in North America during the quarter and attended the annual BIO24 biotechnology industry partnering conference in San Diego in June.

1AD says while a key purpose of the marketing initiatives was to progress existing AdSolis pipeline discussions, they also generated an additional surprising, high-quality, in-bound enquiries from new licensing partner and investor prospects, including newly formed, venture backed companies.

The company says this reflects the record levels of venture capital raised in the US during 2023 that is now needing to be deployed, with new enquiries fuelling momentum and competitive tension to its partnering discussions.

1AD says an example of interest in 1AD is a newly formed VC company that has a therapeutic focus on “lung-related fibrotic conditions, skin-related fibrosis and pulmonary arterial hypertension”.

“They have seed funding from a venture capital firm that has backed the leadership team in the past and has committed to substantial funding on in-licensing the right assets,” 1AD says.

“This company is actively seeking in-licensing and collaboration opportunities at pre-clinical, Investigational New Drug (IND)-ready, or early clinical stage and described AD-214 as fitting perfectly with its strategy.”

Subcutaneous delivery continues to pass feasibility assessments

1AD says potential to deliver AD-214 via subcutaneous injection, in addition to intravenous infusion, is seen as a significant value-add by partners because it will add to patient convenience and potentially lower the cost of goods.

Experiments during Q4 FY24 showed that AD-214 could be concentrated to levels sufficient to deliver target doses in volumes below the 1.5 mL maximum considered feasible for subcutaneous injection without showing signs of aggregation or unacceptably high viscosity.

1AD says several tech providers have been identified who can further assist with formulation development.

Strong start to FY25

1AD CEO and managing director Dr Tim Oldham says establishment of AdCella provides clarity and focus to its efforts to build a clinical stage pipeline beyond AD-214 and the biotech is in a strong position for the start of FY25.

“Our partnerships with strategic investor SYNthesis BioVentures and our preferred manufacturer Cell Therapies, together with a pipeline of over 10 potential assets now under due diligence, gave AdCella’s launch significant momentum,” he says.

Oldham says ongoing discussions with potential partners and investors provides confidence in its ability to advance AD-214 into Phase 2 clinical trials, either by out-licensing or co-developing with third party investment in AdSolis.

“AdAlta begins its new financial year in a strong cash position as a result of substantial new institutional investments from New Life Sciences Capital and existing shareholders, the Meurs Group and Stuart Morris.

“These also provide us with access to additional funds as required.”

This article was developed in collaboration with AdAlta, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.