The squeeze on SQZ Biotechnologies is getting tighter. After 12 months of value destruction, the biotech reported that Roche has dropped its option on a solid tumor program—and that SQZ is assessing strategic alternatives to partner “all its clinical and preclinical assets across all disease areas and indications.”
Roche paid SQZ $45 million upfront for option rights in 2018. The deal positioned the companies to work on candidates based on mononuclear antigen presenting cells (APCs), including human papillomavirus (HPV), using the SQZ platform. The platform squeezes cells to make them present tumor antigens to the immune system. Roche also secured an option to develop a tumor cell lysate candidate.
Now, SQZ has learned that Roche will not exercise its option for HPV 16 positive solid tumors under the SQZ-APC-HPV program. The decision leaves SQZ with the full clinical development and commercialization rights for its HPV 16 programs.
In a financial filing to disclose the news, SQZ said it “intends to explore potential strategic alternatives to support the advancement of its oncology programs including HPV 16 positive tumors, in an effort to allow [it] to partner all its clinical and preclinical assets across all disease areas and indications.” SQZ listed partnerships, acquisitions, mergers and business combinations as potential outcomes.
The search for a strategic alternative comes months after the biotech laid off 60% of its staff and paused development of three programs. SQZ made the changes to shift its focus to second-generation enhanced APC cell therapy programs. The biotech expects initial data from the highest monotherapy dose cohort of a phase 1/2 APC study in the second half of 2023. A second program is also set to post data this year.
SQZ ended March with $39.9 million to its name, a sum it forecast would fund operations into next year. The cash, technology and programs could be of interest to potential buyers but, having been delisted, it is unable to offer private companies a route to a major public market.