Pullan's Pieces #156
Pullan's Pieces #156
February 2020
BD News and Analysis for  Biotech and Pharma
Dear --FNAME--,

We will be representing our clients, speaking, learning and networking - hope to see YOU!  



1.  What does it mean to say a Phase 1 deal?

2.  Immunology Licensing Deals Infographic

3. Jessica:  Natural Killers 

4.  Trevor:  The Calendar of Deals

What does it mean to say a Phase 1 deal?
Phase 1 deals are relatively rare.  
Deals are often done in preclinical stage or in Phase 2.  In the graph here, showing 2019 licensing deals where at least US rights were included, there are few Phase 1 deals. 
If we look at what would be publicly available before the date of the deal announcement, we can see most of the "Phase 1 deals" had truly started Phase 1 before the date of the deal.  Note, this is a very small number of deals as I removed generics, clinical trial collaborations (not really licenses), deals for a formulation only, and focused on deals where I could clearly identify the lead Phase 1 asset. 

For 31% of the 2019 Phase 1 deals, Phase 1 results had been presented before the deal announcement date.  

What data was available when results had been presented? 

For those deals that had results, 1 was for preliminary activity, 1 had reported Phase 1b results, and 1 was started Phase 2 in a couple of months.  1 trial had reported safety data and 1 trial had been going for over a year, using up most of the expected duration of the trial.   Others may have had results but there were not publicly released.  So it seems many of the Phase 1 deals were likely to have some efficacy signal.  
Value by stage and the problem with deal averages

We often get asked if we should wait to the next stage to partner.  It is a great question without an easy answer.  We often use deal averages as piece of that answer (along with a discussion of risks and company strategy).  

Here is a set of data from BioSci Advisors who do great work with deal terms. 

But even with the access to deal terms from press releases and SEC filings and with BioSci Advisors, Freedom of Information Act requests, the averages should be be looked at with a definite squint.  
The deals within an average are not all the same!  

Here Mark Edwards has highlighted one variable, the inclusion of co-development or no co-development.  Co-development is probably generally not a driver of value but rather a term that bigger partners will put up with if the asset is exciting enough.  With a really exciting Phase 1 asset, partner will accept the complexity that comes with cost and profit shares, or other forms, of co-development.  (Note:  even for the phrase co-development, not all co-developments mean the same thing - some mean the right to contribute for a step up in royalties.) 

Deal averages include a vast array of things. 

Deal averages typically include all deals with assets whose highest stage is the one identified.  (Caution:   In GlobalData if you pull preclinical deals and don't filter them yourself, a search for preclinical deals returns all deals that include a preclinical asset but the selected deals might also include a phase 2 or a marketed asset whose value might really be the driver for deal value!). 

The deal averages include deals for generics at the same time as including very new novel molecules.  The deal averages might include deals that include multiple assets, or may be only for a tiny territory versus global rights.  Often the lists include things that are only a component of the "drug" such as formulation, a bit of IP, a manufacturing method, or in complex products such as CAR T immunocellular  therapies - the scFv that forms the antigen binding domain in a highly engineered cell with other expensive parts.  And we know that deals with big pharma typically have higher values than with small biotechs or deals from universities.  

It is hard to compare your asset to the deal averages as the averages are a mix of so many different things.  It is hard to know if you should continue to get the value of a deal at later stage.  Is the average for Phase 2 deals reflective of the same mix as included in the average for Phase 1 deals?  


So what can we do?

  • We can prune the lists to be a narrower set, generating averages that work better for our assets.

  • We should read deal descriptions and try to find meaningful comparable deals. Of course that is fraught with difficulties too. Is it really comparable? Will partners see it the same way.

  • We can use medians versus averages to reduce the impact of the extreme deals.

  • We can report the minimum and maximum terms and the logic of inclusion and the numbers of deals included.

Clearly, we all still use deal averages but but we should not be glib about what they mean.

2019 Licensing deals Infographic
Jessica:     Natural Killers
In the January article https://app.robly.com/email/reports/1486810 about BiTEs and CAR-Ts,  I may have disappointed some of our readers when I described NK cells as “accessory cells.”  As an olive branch, I offer a little dive into the therapeutic potential of Natural Killer (NK) Cells.  Other than having the "Coolest. Name. Ever"… why are there a growing number of therapeutic products designed to use them or target them?  Are they evil villains, accessory sidekicks, or unsung heroes?

Therapeutic Products

Drugs in Development

Cell Therapy (NK-based)


Antibody (NK-targeting)


Fusion Protein/ Synthetic Peptide (NK-targeting)


Global Data Drugs Database Searches 19 February 2020

What does it mean to be a natural killer?

Natural killer cells are the snipers of the immune system.  They are the cells designed to detect charlatans such as virally infected cells or tumor cells; cells that have mechanisms for evading detection by immune response (T-cells).  Natural Killer cells are innate effector lymphocytes meaning that they can kill indiscriminately*, as opposed to T-cells which can only kills cells they have been trained to recognize via their surface receptors (T-cell receptor, TCR).  Rather, they kill by sensing abnormalities in cell surface expression - most notably the lack of HLA-1 on nucleated cells; a trick used by both viral-infected cells and tumor cells.   Direct killing by NK cells is mediated by release of cytolytic molecules such as perforins and granzymes, typically triggered by antibody dependent cytotoxicity (ADCC) which involves engagement of CD16A (Fc𝛾RIIIA) on the surface of NK cells. Furthermore, they can also induce target cells to initiate apoptosis. 
*Some say NK cells should be called “serial” killers because they can kill different target cells.  Cool.


NK cells in Immunotherapy

Beneficial activities of NK cells in the tumor environment include:

  • Secretion of cytokines (such as INF-𝛾) which encourages HLA-1 expression on tumor cells – promote T-cell mediated killing of tumor cells

  • Direct recruitment and activation of dendritic cells (DCs) to the tumor via cell surface receptors (CCL5, XCL1, and FLT3L) expressed on their surface

  • Direct killing of myeloid-derived suppressor cells (MDSCs) alleviating suppression of anti-tumor T-cells (which can include CAR-T cells) – suppress the supressors!

Natural Killers as Therapeutic Products

Currently, there is much interest in NK-based cell therapy products.  Primary cells are typically isolated from apheresis of peripheral blood (leukopaks) or the isolation and maturation of CD34+ cells from umbilical cord blood.  Other sources of cells include the NK-92 cell line, placental-derived cells, or induced pluripotent stem cells (iPSCs).  Therapeutic products derived from stem cells, or immortalized cell lines such as NK-92, have the potential to yield much bigger batches of cells compared to products derived from primary cells as NK cells do not clonally expand to the extent that T-cells do.  Furthermore, due to the lack of HLA restriction, NK cell-based products should be more readily amenable to universal donor/allogeneic/off-the-shelf paradigm than T-cells. 

Due to the relative ease of allogeneic processing for NK cells, CAR-NK cells are growing in popularity though one challenge is that NK cells are difficult to transduce.  These cells are equipped to detect and kill virally infected cells, of course they will be hard to “infect” with a viral vector.  There are strategies to overcome this though, such as transduction of the stem cells (if not starting with primary PBMCs) prior to differentiation to mature NK cells.  A side-by-side comparison of CAR-NK versus CAR-T attributes is shown here:



Allogeneic potential

High*; no HLA matching required

*Must verify there are no contaminating T-cells


  • HLA matched donors
  • Gene editing to remove endogenous TCR

Cytokine Storm

Presumably attenuated compared to CAR-T


  • Control with combination therapy (eg mAb to target checkpoint inhibitors or key inflammatory cytokines)
  • Modulate with gene editing

Other Clinical Considerations

  • Not likely to persist (not necessarily a bad thing depending on the application)
  • May be more potent with combination therapy (eg mAb to target checkpoint inhibitors or BiKEs)
  • Likely to establish (persistent) memory cells
  • Graft versus Host Disease (GvHD, for allo CAR-T)

Manufacturing Challenges

  • Ex vivo expansion is limited (with the exception of immortalized cell lines)
  • Transduction of primary NK cells can be a challenge
    • May need to transduce stem cells or use non-viral methods of CAR delivery
    • CAR constructs designed for T-cell; need CAR designed for intracellular stimulation of NK


  • Batch-to-batch variability
  • Poor expansion due to patient/unhealthy starting material
  • Logistics


  • Batch-to-batch variability due to starting from different donors but less impactful

Extracellular vesicles

Another growing area of interest is for the development of extracellular vesicles from NK cells (NK-EVs) as therapeutic products.  Extracellular vesicles, sometimes called exosomes (which are similar), are essentially little bags of peptides and small molecules that bud off of the surface of the cells.  For a crash course on these fascinating products see Pullan’s Pieces Nov 2018 https://app.robly.com/email/reports/1455882.  In the case of NK-EVs they can contain cytolytic factors that could penetrate tumors and help eliminate tumors; or at least get the party started by turning cold tumors hot. 

Natural Killers as Therapeutic Targets

Because NK cell function can be impaired in cancer patients, there are development efforts to boost endogenous NK cells in the tumor in order to promote direct (NK-mediated) as well as indirect (T-cell mediated) tumor killing.  Checkpoint inhibitors are a class of products that can promote NK cell activity (and indirect T-cell activation) as well as have direct impact to T-cells.  Additionally, there is a growing list of compounds that are being developed to specifically target NK cells via engaging NK cell surface receptors such as CD16 and NKG2D.  In fact, similar to the Bi-specific T-cell Engagers (BiTES) we discussed last month, Bi- and Tri- specific Killer Engagers (BiKEs and TRiKEs) are being developed to promote endogenous NK cells.  Similar to the BiTEs in which the molecule would bind a surface receptor (over)expressed on tumor cells and CD3 on the T-cells in order to bring both cells together; BiKEs bind tumors and CD16 on NK cells to bring them together.  The TRiKEs often have IL-15 engineered into the BiKE molecule for added NK cell activation. 

Killer Deals

Therapeutic Products Composed of or Targeting NK Cells


Total Deal Value $M

Upfront $M

Adoptive Cell Therapy

(Mostly CAR-NK)


Mean:  259

Median:  22

Mean:  24

Median:  0.10*

Checkpoint Modulator

(Mostly targeting NK receptors)


Mean:  247

Median:  15

Mean:  19

Median:  35**

*Several deals had no upfront. **One deal had $1B upfront and $2.8B total deal value

Global Data Deals Database Searches 21 February 2020

With a growing list of pipeline products of course there will be established partnerships.  The majority of the deals summarized above were at preclinical, with a few at Phase I and/or II.  In previous articles we’ve observed differences in deal values between cell therapies and other technologies with cell therapy deals often commanding smaller investment.  However, here we see no discrepancy.  One reason for this could be that the cell therapies here are all allogeneic and perhaps there is a higher forecast for such products compared to autologous (patient-specific batches).  With the ability to manufacture multiple doses/batch, and the “off-the-shelf” nature of these products the cost of manufacturing is likely to be significantly less for allogeneic than autologous products.  Could NK-based off-the-shelf cell therapies usher in the first wave of allogeneic immuno-oncology cell therapy products?
Trevor:  The Calendar of Deals

After the cold and wet week spent every January in San Francisco, how long does it take you to start dreaming of warmer climes?   
And with summer now “coming up” (depending on your personal coordinates in the space-time continuum relative to the closest sun-drenched beach), I thought I’d take a look at last year’s closed deals for a sense for just how “dead” the dead of summer was in 2019.  

According to GlobalData, there were 553 licensing agreements, 743 partnerships (defined as including a JV, co-marketing or co-development)  and 230 Series A financings that closed in 2019.  Here is a look at the simpler licensing deals by quarter for 2019.  



The pattern of the quarters was the same in 2018 for both licensing (below) and partnering deals (not graphed). 

It appears we do kick off each new year and wrap up deals at the end.  And yes… the summer lull is real but not as much as one might expect.  Deals do have a “life of their own” (as do corporations of course, legally speaking, always calling you back to work 😊) and deals have to get done before that other maxim, “time kills all deals”, rings the bell on your current negotiation.
While scheduling the family’s summer plans, whether it’s trips to the local pool, summer camps or distant locales, you might want to make a special note about July.  July, of course, is the jumping off point into those summer pools and BBQs, and in 2019 it was the best time to get a licensing deal completed before the road trips commenced.  Deals still get done around July but June and August were the slowest months of 2019 followed by September and October. 
When it came to raising money for early stage ventures (Series A closing) in 2018 and  2019, there was little similarity to the Pharma licensing calendar.  And not much consistency in pattern.  Maybe this is because the VC are opportunistic and deals can move more quickly?  
So, if you find yourself in the middle of licensing due diligence come March/April, you might want to keep your travel plans flexible.  On the other hand, if you’re starting in on the definitive agreement during that time-frame, then you might just make your August reservations at that national park you’ve been wanting to (re)visit.  And if you are working on a Series A, until the investor tells you “No to this round”, they’re telling you there’s a chance!
www.Pullan Consulting.com

Pullan Consulting (www.PullanConsulting) provides advice and execution for biotech partnering and fund raising, with outreach to partners and investors, help with shaping of presentations, evaluations and market analysis, preliminary valuations and deal models, and negotiations from deal prep to term sheets to final agreements. 
We have extensive scientific and financial experience, with many deals signed. 

Send us an email or set up a call if you want to explore how Pullan Consulting might be of help!

Linda Pullan                     Linda@pullanconsulting.com 
Trevor Thompson             Trevor @pullanconsulting.com 
Jessica Carmen               Jessica@pullanconsulting.com 
9360 W. Flamingo Road, Suite 110-554 Las Vegas, NV 89147