Novartis looks ahead to China with Kymriah manufacturing pact

As Novartis plans for new approvals across the world for its CAR-T cancer treatment Kymriah, it has struck a deal with a Chinese biotech to produce the cell therapy there. (Novartis)

Novartis’ novel CAR-T treatment Kymriah is still getting established in the U.S. and only recently won approval in Europe, but the drugmaker is already making moves to introduce it to China.

The Swiss drugmaker has struck an equity deal with Cellular Biomedicine Group (CBMG), a Chinese biotech, to manufacture the specialized drug for it in China. CBMG is a clinical stage company which is developing its own pipeline of CAR-T, TCR-T and TIL and stem cell candidates.

Novartis in an emailed statement today said that it couldn’t disclose how soon it expects to seek approval for the cell therapy there but that the CBMG collaboration “is a step toward our efforts to bring Kymriah to patients in China.”

“CBMG came to our attention as we were looking for a collaborator that would be capable of helping us to manufacture and supply Kymriah to patients in China, as local regulations require that the product be manufactured in China,” Novartis said. “This partnership is essential to addressing the needs of patients in China as part of our mission to progressively implement access to Kymriah to patients around the world.”

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Under the deal, Novartis will make a $40 million investment, or $27.43 a share, for about 9% of the equity for Cellular Biomedicine Group. For that Novartis will get royalty-free, worldwide intellectual rights to certain CBMG CAR-T technology. CBMG will receive a single-digit escalating percentage collaboration payment based on net product sales. The Chinese company also will get a mark-up from Novartis on its manufacturing costs. Novartis’ current plan is to manufacture CAR-T cell therapy in CBMG facilities in Shanghai. 

CBMG says it has “best-in-class manufacturing in China” with 12 independent cell production lines that meet China and U.S. FDA standards. It will handle manufacturing of Kymriah in China, and Novartis will deal with sales and distribution.

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Kymriah was approved last year to treat young patients with leukemia and in May got a green light to treat adults with relapsed large B-cell lymphoma—a nod that puts it in direct competition with Gilead Sciences' Yescarta. It won approval in Europe in August to treat acute lymphoblastic leukemia (ALL) and diffuse large B-cell lymphoma (DLBCL). Novartis said it would launch Kymriah initially in the pediatric ALL indication, as it continues to ramp up capacity.

The process to make the potential cures requires that blood be taken from a patient, cryopreserved and shipped to a manufacturing facility. There, T cells are reprogrammed to hunt and kill cancer, then manufactured in the lab and shipped back for infusion into the patient, all in the shortest time possible to try to outrun aggressive cancers. Novartis in the U.S. has a target turnaround time for manufacturing of 22 days.

Novartis’ plant in Morris Plains, New Jersey, had been handling initial demand but with the approval in Europe, it announced it would invest CHF90 million ($91.5 million) over three years on an existing building at a production site in Stein, Switzerland, to ensure speedy delivery in the EU. Novartis expects to initially have 260 positions and create up to 450 new jobs by 2021.

In July, the drugmaker acknowledged it had run into some manufacturing issues at the New Jersey facility around its production for relapsed large B-cell lymphoma. It said the problem revolved around cell variability when treating DLBCL.

Liz Barrett, CEO of Novartis Oncology, explained during the second-quarter earnings call that the label for commercial production is more stringent than in clinical trials for the percentage of viable cells and that production has been out of spec because that percentage has not been met at the more stringent commercial level. While production was not interrupted, Barrett said Novartis was working closely with the FDA as it figures out how to resolve the issue.