Roche's recent $1.5 billion deal to acquire Poseida Therapeutics marks a significant milestone in the field of cell therapies. This acquisition is set to establish off-the-shelf cell therapies as a new core capability at Roche, with the potential to democratize CAR-Ts.

Roche's Bold Move in Cell Therapy Market

Background and Partnership

In 2022, Poseida partnered with Roche, accepting a $110 million upfront in return for licenses on two cell therapy candidates and options on other prospects. This deal, which included $6 billion in milestones, deepened Roche's involvement in cell therapies. While Roche initially stayed on the sidelines during the early years of excitement about CAR-T, it has now struck deals to build out a significant cell therapy presence.The Poseida takeover, announced alongside a setback for Roche's TIGIT program, shows Roche's continued pursuit of the cell therapy market. Roche agreed to buy the biotech for $9 a share in cash, with a further $4 a share tied to the achievement of certain milestones, resulting in a total equity value of $1.5 billion.

Acquisition and Pipeline

The outlay gives Roche control of a pipeline of cell therapies and the underlying technology platform. Roche already has licenses to Poseida's two lead blood cancer programs. The biotech moved a CAR-T cell therapy against BCMA into the clinic in multiple myeloma in 2022 and began testing a CD19xCD20 prospect in humans this year. Roche also has an option on Poseida's CD70-directed acute myeloid leukemia asset.Buying Poseida gives Roche full ownership of these assets, plus a BCMAxCD19 prospect that Poseida is developing in multiple myeloma and autoimmune diseases and a clutch of solid tumor candidates. The solid tumor work, which includes a collaboration with Astellas, is led by a MUC1-C candidate that moved into the clinic in 2022.

Unique Technology and Benefits

Other companies are targeting cell therapies at the same targets, but Roche is betting on Poseida's nonviral platform to set its candidates apart. The platform is designed to generate off-the-shelf CAR-T therapies rich in T stem cell memory cells, a long-lived, self-replicating cell type identified by Poseida as a way to improve safety and efficacy.Charles Fuchs, M.D., global head of oncology and hematology drug development at Genentech and Roche, presented the case for the platform at the company's Pharma Day event in September. He stated that around 20% of patients eligible for CAR-T receive cell therapy. Poseida's donor-derived healthy stem cell memory T cells could enable Roche to "truly scale CAR-T therapy to a much broader population."The Roche exec also highlighted Poseida's gene editing tools, including "piggyback insertion technology, which allows for the delivery of multiple CARs in a single step with great efficiency and without the need for viral delivery systems." Another Poseida technology "allows for multiple knock-in and knock-outs" to prevent graft-versus-host and host-versus-graft responses.

Stock Performance and Investor Sentiment

Poseida has faced challenges in getting investors excited about the technology. It went public in 2020 and briefly traded above $15 a share. Since then, its share price has fallen more than 80% to close at $2.86 before the Roche deal was announced. However, investors drove the biotech's share price up more than 200% in premarket trading. At $9.20, the stock is trading above the upfront offered by Roche but still below the price including success-based payments.This acquisition not only gives Roche access to valuable assets and technologies but also presents an opportunity to make a significant impact in the cell therapy market and potentially revolutionize the treatment of various diseases.