Obsidian Therapeutics is merging with Galera Therapeutics to advance clinical development of a pipeline led by a next-generation cell therapy for melanoma that could offer advantages over the only cell therapy currently available for treating advanced cases of this type of cancer.
When the transaction closes, the combined company will operate under the Obsidian name led by legacy Obsidian’s management team. This publicly traded company will also have a fresh $350 million from an investor syndicate betting on Obsidian’s prospects to bring cell therapy to solid tumors. In the April 14 merger announcement, the companies said they will apply for a Nasdaq listing under the proposed stock symbol “OBX.”
Legacy Obsidian is a privately held biotech company based in Cambridge, Massachusetts. The first cell therapies that reached patients were made from a patient’s own T cells. Obsidian focuses on a different type of immune cell called a tumor-infiltrating lymphocyte, or TIL. These cells have already penetrated a tumor, so they recognize a patient’s cancer. But TILs are small in number, so they’re not able to defeat the cancer.
A TIL therapy is made by isolating these cells from a sample of a patient’s tumor, then multiplying them in a lab. Those cells are then infused back into the patient to fight the cancer. There’s already a TIL therapy approved for melanoma. The 2024 FDA approval of Iovance Biotherapeutics’ Amtagvi in advanced melanoma made this non-engineered TIL therapy the first cell therapy approved for treating a solid tumor. But Amtagvi requires dosing alongside an IL-2 therapy to activate the TIL therapy’s anti-tumor activity, which comes with toxic effects.
Obsidian’s manufacturing process for OBX-115 includes the additional step of engineering the TILs to produce IL-15, a signaling protein that prompts an immune response. The IL-15 is bound to the membrane of the therapeutic cell rather than secreted by it. The company says membrane-bound IL-15 eliminates the need to administer a high dose of IL-2, which reduces toxicity and increases the number of patients who could benefit from cell therapy.
In an investor presentation, Obsidian added that OBX-115 requires less lymphodepletion, the preconditioning drug regimen that prepares a patient to receive a cell therapy. Less lymphodepletion further reduces toxicity and could support dosing of the TIL therapy on an outpatient basis.
“At Obsidian, we are striving to deliver a best-in-class TIL cell therapy developed using our proprietary protein-regulation technology,” Obsidian CEO Madan Jagasia said in a prepared statement. “We believe OBX-115 offers an opportunity to provide patients with an improved TIL product and patient experience.”
In Phase 1 results presented last year during the annual meeting of the American Society of Clinical Oncology, Obsidian reported OBX-115 led to a 67% overall response rate for the recommended Phase 2 dose. There were no dose-limiting toxicities and no treatment-related deaths. OBX-115 is currently in Phase 2 testing for advanced melanoma and Phase 1 testing for non-small cell lung cancer. Data from both studies are expected next year.
To support development of the Obsidian pipeline, Obsidian and Galera have secured $350 million in funding that will close just prior to the completion of the merger transaction. Participants in this private placement include new investors Balyasny Asset Management, Caligan Partners LP, Eventide Asset Management, Nantahala Capital, Octagon Capital, Redmile, Spruce Street Capital and Trails Edge Capital Partners. The investment syndicate also includes earlier Obsidian investors Atlas Venture, Deep Track Capital, Foresite Capital, Janus Henderson Investors, Logos Capital, Novo Holdings, Paradigm BioCapital Advisors, Pivotal bioVenture Partners, RA Capital Management, RTW Investments, TCGX and Wellington Management. Obsidian and Galera expect this cash infusion will support operations of the combined company into the second half of 2028.
Publicly traded Galera also focuses on cancer, but has encountered setbacks. The Malvern, Pennsylvania-based company’s former lead therapeutic candidate, avasopasem, was developed for reducing oral mucositis, a common side effect of radiotherapy. In 2023, the FDA turned down Galera’s submission for the therapy and asked for another clinical trial. In its financial reports, Galera said it did not have the resources for such a study. A corporate restructuring led Galera to shed most of its employees and assets, including the sale of avasopasem and another drug, rusosopasem, to privately held Canadian company Biossil. Galera still has one cancer drug candidate, a pan-inhibitor of nitric oxide synthase (NOS) from the 2024 acquisition of privately held Nova Pharmaceuticals. This drug is in Phase 1/2 testing for advanced cases of breast cancer.
When the Obsidian and Galera business combination closes, shareholders of pre-merger Obsidian are expected to own about 53.2% of the combined company and the investors in the private placement will own about 45%. Shareholders of pre-merger Galera will own about 1.8% of the combined company. Galera stockholders will also retain a contingent value right for 95% of all future milestones for up to 10 years stemming from Biossil’s purchase agreement last October. The Obsidian and Galera boards of directors have approved the merger, which is expected to close by the third quarter of this year.
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