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I looked at Poseida Therapeutics (NASDAQ:PSTX) last year when the stock was trading at $10 and they had early data. The stock plummeted to $2 this year, but then they signed that $6bn deal with Roche, and the stock has now more than doubled.

Poseida is a developer of allogeneic CAR-T therapies targeting both liquid and solid tumors, and gene therapies to treat rare diseases. They are in early stages, with one self-owned phase 1 product, P-MUC1C-ALLO1, targeting solid tumors; and one in collaboration with Roche, P-BCMA-ALLO1, targeting multiple myeloma.

Last year, when I covered it, the lead candidate was P-BCMA-101, an autologous product which produced positive phase 1 data, and this data informed the company's first allogeneic program, P-BCMA-ALLO1. So, in December, the company announced that it was winding down the autologous program. Unlike winding down a drug candidate, which means the end of it, winding down an autologous CAR-T program in order to move to an allogeneic version of it is a different, more constructive, situation. Investors should not read any negativity into this, ceteris paribus.

So anyway, the company claims that P-BCMA-101 had a highly differentiated tolerability profile; in fact, it was so safe and well-tolerated that the entire trial was done in an outpatient setting. There were very low levels of Cytokine Release Syndrome or CRS, and no neurotoxicity; however, while one can expect lower CRS in autologous therapies, Poseida has to show that it remains so for its allogeneic product candidate, as well.

I discussed Poseida's three technology platforms in my previous article. These platforms are nonviral piggyBac DNA modification system using transposons, Cas-CLOVER gene editing platform, and Nanoparticle/AAV delivery technology. The company's scientific advisors include Dr. Carl June and Dr. George Church, two well-known names in the field. The company's 10-K contains a lot of details about how the company thinks its platform and products are differentiated, and so on. Preclinical data, the company says, has corroborated those claims. Yet there is a need to do these clinical trials because, as we are aware, preclinical doesn't always translate exactly so into clinical, and even early stage clinical may not translate well to large, randomized, pivotal trials. So we need to wait for data before we can put much faith in these claims.

In my last article, a reader wanted to know who owns the PiggyBac technology, and referred to a company called Demeetra, which operates in agro-biotech. Looking at Poseida's 10-K, we note that they call the piggyBac platform proprietary, and clarify their relation to Demeetra as follows:

In addition, Dr. Ostertag, our Executive Chairman, a member of our board of directors and the beneficial owner of approximately 15% of our voting stock as of March 4, 2022, is the sole director of Demeetra AgBio, Inc., or Demeetra, serves as its President and Secretary and together with his affiliated entities, owns on a fully-diluted basis, 63% of its capital stock.

Dr. Ostertag's profile on the company website makes this even clearer:

Dr. Ostertag is currently Executive Chairman, after serving as our founding Chief Executive Officer from July 2015 to January 2022 and as a member of our board of directors since May 2015. Dr. Ostertag invented or co-invented a majority of the genetic engineering platform technologies used by Poseida for human therapeutics. In February 2015 he directed Poseida's spin out from Transposagen Biopharmaceuticals, Inc., a biotechnology company that developed many of the genetic engineering platform technologies…

In August, Poseida signed a potentially huge deal with Roche (OTCQX:RHHBY) for their CAR-T programs, specifically their lead candidate P-BCMA-ALLO1, targeting multiple myeloma. Key terms of the deal are:

There are four components to the deal. The first part, worth $1.5bn, comprises existing BCMA and CD19-CD20 programs, to which Roche gets an exclusive, worldwide license. The two parties will co-develop these programs.

The second part comprises two other programs, a BCMA-CD19 dual inhibitor and a CD70 program. These are preclinical programs, and Roche "will decide on its option once a candidate is chosen for studies to build up to clinical trials or, if it pays a fee, after the completion of phase 1 dose-escalation trials." This part is worth $1.1bn.

The third part is a two-year joint research collaboration with an optional 18-month second program to "explore and preclinically test a specified number of agreed-upon next generation therapeutic concepts relating to allogeneic CAR-T therapies." The two programs may consist of up to six hematologic malignancy-directed, allogeneic CAR-T programs. This part of the deal That part of the deal is valued at $2.9bn.

Lastly, there's a solid tumor license program worth another $415 million.

Roche is the world's largest oncology company, but when the CAR-T thing was taking off, Roche never got into it, saying, in effect, that prices were too high. Then it did a small deal with Adaptimmune (ADAP); Poseida is by far its largest CAR-T/cell therapy deal.

In October last year, Poseida signed another (gene therapy) deal with Takeda, which includes up to six gene therapies and two additional optional programs. The deal is valued at $45 million in upfront payment and up to $3.6 billion in milestone payments.

Poseida claims many differences with other CAR-T technologies. One difference is that they use TSCM or stem cell memory T cells for their CAR-T constructs which they claim produces greater safety and durability. Another is that it does not use an antibody to bind to the target antigen, instead relying on an artificial scaffold based on Johnson & Johnson's Centyrin technology:

Centyrins have similar binding affinities to the antibody-derived single chain variable fragments (scFv), but are smaller, more thermostable and predicted to be less immunogenic. Importantly, no signs of tonic signaling leading to T cell exhaustion have been observed with CARTyrins unlike scFv-based CAR molecules, which can interact with each other on the surface causing non-specific CAR signaling.

Financials

PSTX has a market cap of $413mn and a cash balance of $279.0 million excluding the $35 million milestone that was earned and not yet received as of September 30, 2022, but including the approximately $80mn earned through a secondary offering after the Roche deal. Research and development expenses were $35.1 million for the three months ended September 30, 2022, while G&A expenses were $9.4mn. At that rate, the company has a cash runway of 6 quarters or more.

Bottomline

Roche has more money than retail investors have. They can afford to throw a few hundred million at a few smart gambles. If at least half of them succeed, and they get a blockbuster product out of that, then they get a windfall. That is not true of retail investors. Having said that, PSTX has been able to get attention from two big pharma now, excluding Novartis which paid Posieda a lot of money in the pre-IPO days. I have no data to base an opinion on, so I will continue watching PSTX for the near future.

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