Precision BioSciences’ most advanced cell therapy for a type of blood cancer is on track for a pivotal clinical trial, but that study is no longer its responsibility. The biotech is outlicensing rights to the therapy in a deal that extends its cash runway and enables it to focus on its in vivo gene-editing programs.

The buyer is Imugene Limited, which is paying $21 million up front for global rights to azercabtagene zapreleucel, or azer-cel, an allogeneic CAR T-therapy for blood cancers. The Australian company will take over developing the therapy for large B-cell lymphoma (LBCL) in patients who have relapsed following treatment with a highly personalized cell therapy made from their own immune cells. Imugene’s license includes an option to develop up to three additional cancer research programs.

CAR T-therapy provides a treatment option for advanced cases of blood cancers. The currently available versions of these therapies are autologous, manufactured by harvesting a patient’s immune cells, engineering and expanding them in a lab, and then infusing them back into the patient. It’s a lengthy and cumbersome process, and many companies are trying to improve on it. Durham, North Carolina-based Precision is one of the companies developing CAR T-therapies readily available “off the shelf.” Azer-cel is produced from donor cells engineered by Precision’s proprietary gene-editing technology, ARCUS. The engineering is intended to avoid graft-versus-host disease, a complication risk associated with donor-derived cell therapies.

In May, Precision reported data for 61 evaluable patients in a Phase 1 dose-escalation study. The overall response rate was 83%; the complete response rate was 61%. In late July, Precision announced it had received the final minutes of its FDA meeting to discuss the therapy’s path forward. Based on that discussion and azer-cel’s clinical data, the company said it was proceeding with discussions with “multiple potential strategic partners” for its cell therapy assets.

Imugene, which is publicly traded in Australia, is a cancer immunotherapy developer. Its pipeline spans an oncolytic virus currently in Phase 1 testing and a B-cell immunotherapy in mid-stage clinical development. The deal with Precision gives the Australian biotech its most advanced program. In a video of the announcement posted to the company’s website, Imugene CEO Leslie Chong said the company expects to begin a registrational study for azer-cel “as early as 2024.”

The outlicensing of azer-cel makes Precision a preclinical-stage company again, but one focused on in vivo editing therapies. The company has said its ARCUS platform employs cutting enzymes that are smaller than those used in other editing technologies, such as CRISPR. The smaller size enables in vivo edits and complex edits, such as gene insertion.

The most advanced in vivo gene editing program in the Precision pipeline is PGENE-HBV, a wholly owned hepatitis B therapy in preclinical development. In regulatory filings, the company said it expects to submit an investigational new drug application in 2024.

Precision is also working with Novartis, which last year paid $75 million up front to collaborate in the development of in vivo editing therapies for inherited blood disorders such as sickle cell disease and beta thalassemia. A separate alliance with Eli Lilly is developing an in vivo editing therapy for Duchenne muscular dystrophy. That partnership is also pursuing liver and central nervous system disorder targets, but specific diseases have not been disclosed. Both big pharma companies are providing research funding for the partnered programs. Precision also has a deal with startup iECURE, which has rights to apply the ARCUS technology in four liver indications.

The upfront payment from Imugene is a mix of cash and equity. According to a Precision regulatory filing, it’s $8 million in cash and $13 million in convertible notes that will mature on the first anniversary of the deal’s closing date. The transaction also puts Precision in line for an $8 million near-term payment, also in cash and equity. That payment is contingent on successful completion of Phase 1b dosing in patients with relapsed large B-cell lymphoma. Precision could receive up to $198 million in milestone payments, plus royalties from sales of an approved product. For each additional program that Imugene selects, Precision is eligible to receive up to $145 million in milestone payments as well as royalties from sales.

In its report of second quarter financial results early this month, Precision reported a cash position of $137.8 million. By offloading its allogeneic cell therapy work, Precision expects to reduce operating expenses by about $20 million. Those savings along with the cash from the Imugene transaction extend Precision’s cash runway through the third quarter of 2025, the company said.

“As we pivot our full attention and resources to leveraging the core features of ARCUS for differentiated in vivo gene editing programs, we are prepared to capitalize on the utility of ARCUS to produce a profound impact on diseases in the liver and beyond, including those that are best suited for gene insertion or excision of large defective gene sequences,” CEO Michael Amoroso said in a prepared statement.

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