ImmunityBio has traded future profits for cash to kick off commercialization of its near-approval cancer drug candidate. Oberland Capital took the other side of the deal, handing the biotech $210 million, with more to follow, in return for quarterly royalty payments on global net sales.
California-based ImmunityBio spent most of last year trying to recover from the FDA’s rejection of a filing for approval of Anktiva, an IL-15 superagonist fusion protein, in non-muscle invasive bladder cancer. The setback, which the biotech blamed on contract manufacturing organizations, left ImmunityBio racing to refile while trying to bolster a bank balance that had dwindled to $43.5 million by the end of June.
ImmunityBio made progress on both fronts over the second half of 2023, securing a new FDA approval decision date and fresh financing from its founder Patrick Soon-Shiong. Days before the end of the year, the biotech finalized the deal with Oberland to further strengthen its near-term financial position.
Oberland has paid an initial $200 million for the right to receive tiered payments ranging from 3% to 7%. If the FDA approves Anktiva, Oberland will pay ImmunityBio a further $100 million in return for a higher royalty rate range, 4.5% to 10%. Oberland has also taken a $10 million equity stake in ImmunityBio and has an option to buy another $10 million in stock down the line.
The investor has secured terms that position it to generate a return on the investment. On the twelfth anniversary of the deal, ImmunityBio will pay whatever is needed to bring Oberland’s return up to 195%, unless the royalties have already reached that threshold. Oberland also has an option to end the deal early in various situations, including bankruptcy, and request a return ranging from 120% to 195%.
ImmunityBio’s agreement with those terms has secured its near-term financial future. The money adds to the $178 million the biotech had (PDF) in cash and equivalents at the end of September. Armed with the resources, ImmunityBio will ramp up commercialization work ahead of the anticipated FDA approval of Anktiva by April 23 and run clinical trials to expand use of the molecule into other solid tumors.