ImmunityBio Secures $470 Million in Financing from Founder Following N-803 BLA Rejection

September 16, 2023 / eMedClub News /--On September 11, 2023, ImmunityBio, Inc., an immunotherapy company, announced that it had secured $470 million in equity and debt financing provided by its founder Dr. Patrick Soon-Shiong and affiliated entity Nant Entities. This financing will bring the company approximately $200 million in proceeds, including the conversion of existing debt into equity and a new convertible debt instrument from Nant Capital, LLC (an affiliate of founder Dr. Patrick Soon-Shiong).

With the new financing from Dr. Soon-Shiong, including the extension of the maturity date of existing debt, the company believes it is well-prepared to fund ongoing business operations and pre-commercialization activities while continuing to advance the regulatory approval process for N-803 plus BCG (Bacillus Calmette-Guérin) in the treatment of BCG-unresponsive non-muscle invasive bladder cancer. The newly signed $200 million convertible note with Nant Capital has a three-year term and is convertible into ImmunityBio common stock. Additionally, the financing restructures the company’s existing debt obligations with Nant entities, including extending the maturity of recent-term debt by one year to December 2024. In short, the company secured a $200 million investment, and a $270 million debt was converted into equity.

Why the company was able to gain heavy investment from its founder personally starts with a failed product launch. ImmunityBio is a clinical-stage immunotherapy company. Its series of immunotherapy and cell therapy platforms aim to durably drive and sustain immune responses to create long-lasting efficacy.Its core product, N-803, is a mutant immunostimulatory fusion protein complex based on interleukin-15, which promotes the proliferation and activation of natural killer (NK) cells and CD8+ T cells, but does not include regulatory T cells.

When N-803 is combined with BCG, it produces a synergistic immune response. In 2022, ImmunityBio, Inc. submitted an application to the FDA for the market approval of N-803 in combination with BCG for the treatment of non-muscle invasive bladder cancer (NMIBC) that is unresponsive to BCG.Unfortunately, the FDA rejected the marketing application for this product in combination with BCG for the treatment of NMIBC. The rejection was not due to lack of efficacy but rather because of manufacturing issues.

In fact, the efficacy of this product is excellent. The results of the Phase II/III clinical trials of the product showed that the complete response rate of this combination therapy in treating patients with or without papillary tumors (CIS cohort) reached 71% (59/83), the 2-year overall survival rate was 99%, and the median duration of response was 24.1 months. In the papillary tumor group (non-CIS cohort), the disease-free rate at 1 year was 57%, and at 2 years, it was 48%. Overall, many patients were able to temporarily avoid cystectomy through treatment (91% in the CIS cohort, 95% in the non-CIS cohort), and the safety profile was excellent, with no serious treatment-related side effects reported.

The reason for the rejection mentioned in the FDA's response letter is that the refusal of N-803 to be marketed is mainly due to defects in production and manufacturing. Subsequently, resolving the process issues and updating the safety and efficacy data will allow for resubmission of the marketing application.

But innovation in pharmaceuticals is a slow process, with each step taking time. Solving these issues and resubmitting the data for FDA re-review typically takes over a year, during which the company must continue to cover operational and clinical trial expenses. The company’s financial report shows that, as of March 31, its cash balance was only $91.26 million. Now, with funding issues sufficiently resolved, perhaps driven by strong confidence in their product, founder Patrick Soon-Shiong has personally invested heavily to push the product towards market launch.

Seeing this, many people may be curious about who Patrick Soon-Shiong is and how he possesses such great capabilities. In fact, Patrick Soon-Shiong (Patrick Chen) is an American-Chinese scientist, known as the richest doctor in the world. Chen started his career in medicine, invented anti-cancer drugs, and owns multiple patents. He founded companies such as VivoRx, American Pharmaceutical Partners, and NantWorks, becoming the wealthiest doctor globally. In April 2022, Forbes released the "2022 World's Billionaires List," where Chen ranked 324th with a net worth of $7.3 billion. ImmunityBio is just one of the relatively "young" enterprises he has founded in recent years.

Although ImmunityBio was founded not long ago, the company has made rapid progress. In early 2021, ImmunityBio went public on Nasdaq, and at the time of its IPO, the company's market value approached $18 billion. ImmunityBio can be considered a platform-based enterprise, possessing numerous technology platforms that collectively target the entire immune response. Based on these platforms, the company is able to develop a variety of competitive pipelines. Its layout is also extensive, covering cell therapy, nucleic acid technology, adenovirus vector technology, recombinant protein technology, and more. In addition to N-803, the company’s most notable product is its CAR-NK therapy.

In December 2020, ImmunityBio reached a merger agreement with cell therapy company NantKwest, aiming to create a leading immune and cell therapy company focused on the fields of cancer and infectious diseases. The new company adopted the name ImmunityBio. The NK cell therapy of this company is mainly based on NantKwest's proprietary NK-92 master cell bank, which has been genetically engineered to express high-affinity CD16 receptors, allowing it to directly bind to monoclonal antibodies previously attached to cancer cells, thereby enhancing the killing effect on tumor cells through antibody-dependent cellular cytotoxicity (ADCC). Its product PD-L1.t-haNK is further equipped with a CAR targeting PD-L1.

This merger might aim to develop a combination therapy. Studies have shown that IL-15 can enhance the activity of NK cells and prolong their duration. Therefore, N-803 and CAR-NK therapy are excellent partners, and their combination therapy has entered phase II clinical trials. The latest data from 2023 shows that the combination of N-803, PD-L1.t-haNK, and Aldoxorubicin for third-line treatment of advanced pancreatic cancer has an average OS of 5.8 months, which is better than the historical data of 2-3 months.Submitted FDA Type B meeting to seek approval for market entry.Leading the way.

Overall, ImmunityBio is an excellent innovative drug company with deep accumulation in multiple technical fields, but unfortunately, it has made some small yet potentially fatal mistakes. In the context of capital retreat, opportunities for biotech companies are already limited, and often they can only bet all their resources on one or two pipelines.If the drug fails to come to market due to efficacy issues, there is nothing to say, but if it is delayed due to manufacturing issues,It is undoubtedly regrettable. Fortunately, the company's founder has tremendous energy and capital to support this company through mistakes, but most biotech firms often don't have the chance to make errors and can only move forward bravely.