Tevogen Bio Seeks Advisor for Capital Raise Before Exploring Options for Lead Asset – CEO
by Deborah Balshem
July 8, 2024
Tevogen Bio Holdings [NASDAQ:TVGN] is seeking an advisor to raise USD 50m-USD 75m for the advancement of its lead therapeutic for COVID-19 in cancer patients and long COVID, said founder and CEO Ryan Saadi.
The Warren, New Jersey-based specialty immunotherapy biotech company aims to complete the financing by the end of 3Q24 and is considering a variety of equity or equity-linked transactions, Saadi said.
Roughly USD 10m-USD 12m of the proceeds are earmarked for the acquisition of a clinical manufacturing facility in New Jersey or Pennsylvania, ideally a GMP-certified cell therapy or similar lab with up to 10 clean rooms, the CEO noted. Tevogen would also consider a long-term lease or lease-with-buy option, he said.
Tevogen also plans to hire an advisor in mid-2025 to explore commercialization options for its lead asset TVGN 489, which Saadi said could start producing revenue as soon as 4Q25 or potentially sooner if approved for Emergency Use Authorization of compassionate use programs by the US Food and Drug Administration.
In a January 2023 Phase I study, TVGN 489 showed positive results in treating high-risk patients with the delta, omicron 1 and omicron 2 variants of COVID-19. Tevogen aims to launch a combination Phase II/Phase III for TVGN 489 for the treatment of COVID-19 in cancer patients by the end of this year and another Phase II/Phase III for Long COVID in mid-2025, Saadi said.
It is estimated that there are more than 103 million cumulative confirmed COVID-19 cases in the US alone, while more than 17 million adults have experienced long COVID, according to Saadi.
Tevogen prefers to ink a 50/50 revenue-sharing agreement for TVGN 489, though Saadi did not rule out other types of strategic alliances or a full acquisition of the asset. The CEO said logical potential partners or acquirers include “infectious disease companies or oncology companies in the business of immunotherapy or cell therapy,” such as Novartis [SIX:NOVN], Bristol Myers Squibb [NYSE:BMY], Johnson & Johnson [NYSE:JNJ] and CSL [ASX:CSL].
Sid Rajeev, vice president and head of research at Vancouver-based Fundamental Research, said that Tevogen’s technology could prove to be a more cost-effective and targeted treatment compared to conventional options, with extracts from a single donor possibly able to treat hundreds of patients, while the off-the-shelf indication would allow for faster administration and treatment. He agreed with the potential partners or buyers named by Saadi and added Roche [SIX:RO] and Pfizer [NYSE:PFE] to the list.
Tevogen is developing off-the-shelf, genetically unmodified T cell therapeutics using its proprietary ExacTcell platform, which allows for precise targeting of virus-infected cells for large patient populations. The company has three patents granted and more than 20 pending.
Its primary peer is AstraZeneca [NASDAQ:AZN], Saadi said.
According to Rajeev, established drugs in the oncology space typically generate USD 500m to USD 3bn in annual revenue, with an average of USD 2bn. Based on the assumption that Tevogen’s therapies will go through the traditional route of clinical trials and capture 0.2% of the immunocompromised market, Rajeev said it implied annual revenue of USD 2bn is possible.
Though on average only 19% of drug candidates advance from phase I to approval, Rajeev also pointed out that the large markets being targeted by Tevogen, especially infective disease, tend to have higher approval rates.
Rajeev also mentioned that while some conventional antiviral therapies can cost up to USD 300,000-USD 400,000, TVGN’s treatment should be priced competitively at around USD 80,000- USD 100,000.
Saadi, 59, a 2023 Nobel Peace Prize nominee, founded Tevogen in 2020 after holding executive positions at Johnson & Johnson and Sanofi. Tevogen went public via a USD 1.41bn merger with a special purpose acquisition company in February. Saadi currently owns approximately 72% of the business, with management and directors holding a combined 86% of shares.
According to Saadi, only around USD 25m has been invested into product development.
Earlier this month, following the recent elimination of USD 94.9m in balance sheet liabilities, Tevogen announced a definitive agreement for up to USD 50m in financing, consisting of a combination of a USD 36m line of credit and a USD 14m contingent private placement. Proceeds are supporting the development of TVGN 489 and the strengthening of its IP portfolio.
Tevogen has additional oncology, neurology and virology drug candidates in its pipeline for multiple sclerosis, lymphomas, and cervical, mouth and throat cancer. It has 17 employees plus additional outside consultants or consulting firms in legal, public relations, investor relations and finance, Saadi said. Its market cap is approximately USD 114m.
Hogan Lovells provides legal advice to the company and KPMG is its auditor.
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