MBIO - Mustang to sell Worcester site for up to $11M abandons some CAR T cell programs

2023-05-18 09:48:14 ET

Mustang Bio ( NASDAQ: MBIO ) is selling its Worcester manufacturing facility for up to $11M and plans to prioritize resources on certain clinical programs while discontinuing some others, as part of its strategic initiatives.

Under the agreeement, uBriGene (Boston) Biosciences will acquire Mustang's commercial-scale cell and gene therapy manufacturing facility in Worcester, Massachusetts, for a total $11M, which includes $6M upfront plus an additional $5M payable upon Mustang raising $10M in gross proceeds from equity raises.

The transaction, which is subject to conditions, expected to close in June.

The companies will also enter a manufacturing supply agreement, under which uBriGene will manufacture Mustang's lead product candidates, including supporting MB-106 manufacturing for an ongoing phase 1/2 trial.

Portfolio Updates :

CAR T Cell Therapies - Mustang said it will discontinue developing its CD123-targeted CAR T cell therapy MB-102 and its HER2-, CS1- and PSCA-targeted CAR T cell therapy programs. This consists a portion of the company's portfolio of CAR T cell therapies being developed in partnership with City of Hope.

Mustang noted that it will continue to work with Fred Hutchinson Cancer Center to develop MB-106 (CD20-targeted CAR T cell therapy) and with Mayo Clinic to develop its in-vivo CAR T platform technology.

The company added that it will also continue to work with City of Hope and with Nationwide Children’s Hospital on developing MB-109 (MB-101 CAR T cell therapy targeting IL13R?2 on malignant glioma cells + MB-108 oncolytic virus to potentially make these tumors more susceptible to being killed by the CAR-T cells).

Gene Therapies : Mustang Bio said enrollment to investigator-sponsored clinical trials of a gene therapy for X-linked severe combined immunodeficiency (XSCID), which has been licensed to Mustang, has been paused after review of data.

The company noted that it will wait for data from new investigator-sponsored trials planned by its partners that will test a modified version of the current lentiviral vector before starting multicenter Mustang-sponsored trials in newborn and previously transplanted patient populations.

No safety concerns in the trials using the current vector have been seen and no insertional mutagenesis or malignancy were detected in either of the two investigator-sponsored studies, according to the company.

A delayed start of Mustang's multicenter trials for XSCID will allow it to use the safest known vector available in trials and reduce its near-term operating expense.

Management Comment :

"Concentrating our priorities and postponing the initiation of the MB-107 and MB-207 pivotal trials, along with maintaining a reduced headcount, reduces Mustang’s burn and extends our cash runway," said Mustang President and CEO Manuel Litchman.

Mustang expects to incur severance charges related to the facility transaction of ~$2.1M, which is expected to be offset by future annualized operating savings of at least $24M including savings related to personnel, facility and clinical operations and optimization of development portfolio.

In addition, the company said it reduced annual interest expense by ~$4.3M in April 2023 after repaying and terminating a loan and security agreement.

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