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It’s been an interesting year for Poseida Therapeutics, the human therapeutics company that spun out of Transposagen Biopharmaceuticals in 2015. Poseida in January filed for an IPO, only to have it delayed due to the government shutdown. Then, talks with private investors advanced and Poseida nixed its IPO plans in favor of a funding round.

On April 22, the San Diego-based company announced a $142 million Series C funding round led by Swiss pharmaceutical giant Novartis, which invested $75 million. Poseida’s main focus is CAR-T cell therapy for patients with multiple myeloma, which affects about 300,000 Americans a year.

The therapy entails removing a patient’s T cells, modifying them, and reinserting them in the body so that they will fight cancer cells. Poseida also is working on developing allogeneic stem cell therapy based on a “universal donor” that would eliminate the need to use the extract the patient’s T cells, a costly and time-consuming process.

Human therapeutics is a highly competitive area of biotech. Poseida’s main competitor is Cambridge, Massachusetts-based Bluebird Bio, which Xconomy reports may be first to market with plans to file for approval of its therapy next year. Novartis, too, has focused on CAR-T for some time: It owns one of the only two FDA-approved CAR-T therapies, Kymriah, but has faced challenges in manufacturing it.

Poseida CEO Eric Ostertag talked to Karma Network about the company’s competitive position and where its IPO plans stand now.

Karma Network: What does the investment from Novartis mean for your company?

Eric Ostertag: Novartis is top five pharma. They also are one of the very early entrants in the CAR-T space. They are now established as a leader in cell and gene therapy. I think their investment not only gives us validation, but hopefully, over time, synergies. We will be exploring those synergies over the next number of months.

Karma Network: What do you think made Poseida an attractive bet for investors?

Ostertag: We have both a unique gene editing platform technology and a non-viral gene delivery technology, so we’re in a very attractive space right now. To top it all off, we chose as our first therapeutic CAR-T targeting BCMA and relapse refractory multiple myeloma, and that may very well be the hottest target in all of medicine right now. Unlike most CART-T companies, we have the ability to also target solid tumors. Without partnering with anyone, we have the ability to also do allogeneic. All of our assets, both the platform technology, as well as the CAR-T products that I just mentioned, are wholly owned. Then, really, everything that I just said is half of the company. We also have the ability to do gene therapy in other ex-vivo cell types. I think there’s a lot to like from an investor’s standpoint.

Karma Network: Are there other ways that you’re distinguishing yourself in this highly competitive space?

Ostertag: We came at this from a different angle than every other CAR-T company. We started, and actually spun out of a gene delivery and gene-editing company called Transposagen. We had the ability to solve right out of the gate some of the problems that the early generation CAR-T products were having, both in manufacturing and also in the function in the clinic.

Those now are, I think, seen as ahead of its time, because most companies that I’m aware of are trying to get to a non-viral delivery mechanism. One of the attributes that a non-viral technology like piggyBac gives you is a high percent of stem cell memory T cells in your product. We think that the stem cell memory cells in your product are what can ultimately translate into a number of benefits. One is a much better safety profile, which we’ve already demonstrated in the clinical trial. We would predict, although we still have to prove this with more time in the clinic, that we will have a better duration of response.

Lastly, we would predict, and we’ve certainly seen this in a number of preclinical models, a much better and efficacious response against solid tumors. CAR-T hasn’t worked well so far in other people’s hands against solid tumors. We think we have the key to that.

Karma Network: What growth or milestones are you hoping to hit before you refile for an IPO?

Ostertag: No. 1, we have received FDA approval to do our Phase II registrational trial on a fully outpatient basis. That’s quite a big deal for CAR-T, because approximately 70% of the costs of CAR-T is not the cost of the drug itself. It’s actually dealing with the toxicities of the early generation CAR-Ts, such as cytokine release syndrome and also neurotoxicity.

We just simply aren’t seeing that in our patients in the Phase I. We are able to give the product fully outpatient. We would predict that many or most of our patients, other than getting lab value checkups, would not need to come back to the hospital. That will occur shortly. We’re dosing our first patient in late May or early June.

Secondly, I mentioned that we have the belief, based on numerous preclinical models and several indications, that we will have efficacy against solid tumors. We’ve seen efficacy in models that have not been previously treatable with any other therapeutic, including other CAR-Ts. Our first solid tumor target is PSMA, which is for castrate-resistant metastatic prostate cancer. The [FDA application] for that will be filed late this year. Then, lastly, what I view as the third pillar of CAR-T is allogeneic, which can be either in a liquid tumor or a solid tumor. That’s really the big area that other people, other CAR-T companies, are attempting to get into. We have what we believe is a fully allogeneic CAR-T platform.

We have enough money and flexibility now that we would not need to go IPO or do additional fundraising, really, through all of this year and next year. It gives us maximal opportunity to decide when we would like to go IPO. (It) could very well be later this year. That would be after one or two of those inflection points.

Karma Network: What are some of the challenges that you and other companies operating in this space are dealing with?

Ostertag: Well, I’d say the two big ones in the CAR-T space. No. 1, for the other products, early generation products, was toxicity. Despite having, in many cases, significantly higher efficacy than all prior cancer therapeutics for certain indications, the toxicities were high. I believe that we have solved that problem, at least for myeloma. It seems like we’re getting very significantly lower toxicities compared to our competitors.

The other one is that it’s an individualized product. It’s somewhat expensive and time-consuming to produce. The longer-term solution for that is likely fully allogeneic products. Again, that’s something that we and others have been working on.

Karma Network: Longer term, do you see your company branching out beyond just the CAR-T focus?

Ostertag: Absolutely. We’ve had an active R&D program in gene therapy since the spin-out. We’ve been working on stem cell-based therapeutics. We also have had an active program in other areas. We purchased a nanoparticle company, which will allow us to potentially do in vivo liver-directed gene therapies without the need for a virus. So we have numerous early-stage products on the gene therapy side of the fence.

Karma Network: What areas of biotech are drawing the most investment, or where you see the most exciting possibilities?

Ostertag: Gene therapy, I think, is the hottest area of all medicine. Another very hot area is immuno-oncology, and that’s where you get the overlap in CAR-T. And then there is gene editing.

Gene editing can be overlapping, because you need to use gene editing to get allogeneic forms of CAR-T. It can also be used directly as a therapeutic for more classic gene therapies. There again, I think we’re fairly unique, if not unique, in not needing to partner with anyone. We really have all of this in a one-stop shop.

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