Mustang Leads Fortress's CAR-T Ambitions Of Monstrous Proportions

Emerging Company Profile: The two-year-old company combines the Fortress Biotech model with City of Hope's broad expertise in CAR-T technology, plus leadership from a pioneer in the space.

The term "Frankenstein's monster" typically is not a positive way to describe an enterprise, but it may be an apt metaphor for Mustang Bio Inc., a Fortress Biotech Inc. portfolio company.

Mustang combines that umbrella organization's basic business model with significant intellectual property rights to City of Hope technology in the chimeric antigen receptor engineered T-cell (CAR-T) space. The company also tapped key brain power behind one of the early development successes in that therapeutic arena.

Mustang Bio Inc.

Location: New York

R&D Focus: Chimeric antigen receptor engineered T-cell (CAR-T) therapies for cancer.

Disease Area: Oncology

Founding Date: March 2015

Founders: Coronado Biosciences (now Fortress Biotech); Lindsay Rosenwald, Stephen Forman, Christine Brown

Employees: Three, plus Fortress Biotech personnel

Financing To Date: $94.5m in Series A funding [See Deal]

Investors: Fortress Biotech (38.9%), Lindsay Rosenwald (2%), Michael Weiss (2%)

Founded in 2015 as one of Fortress's nine (so far) subsidiaries, Mustang started out with a pair of then-preclinical CAR-T candidates from City of Hope. Since then, the firm has expanded that partnership to five program candidates, each in a different type of cancer. As part of Fortress, a hybrid start-up/venture investment firm, Mustang takes advantage of its parent's centralized resources while operating as a unique entity with its own pipeline and therapeutic focus. (Also see "Fortress Biotech: A Drug Financing Experiment Expands" - In Vivo, 13 Jun, 2017.)

If June's expansion of the partnership with Duarte, Calif.-based City of Hope turned heads, Mustang probably made an even bigger splash with the hiring of its first full-time CEO in April, landing Manuel Lichtman, then the CEO of Arvinas Inc. but before that an 18-year veteran of Novartis AG. Lichtman served as vice president and head of oncology business development and licensing at Novartis, later heading up development of what may be the first-ever approved CAR-T product – CTL019 (tisagenlecleucel), which was licensed from the University of Pennsylvania in 2012. [See Deal] (Also see "Appointments: Bayer, Mustang, Modus, GammaDelta, Poxel, Metrion and Renova." - Scrip, 5 May, 2017.)

The US FDA's Oncologic Drugs Advisory Committee voted unanimously on July 12 in favor of approval of CTL019 for relapsed, refractory pediatric acute lymphoblastic leukemia. (Also see "Novartis' CAR-T Poised For The Market After Unanimous FDA Adcomm Review" - Scrip, 12 Jul, 2017.) Lichtman said in an interview that Mustang's plan is both to learn positive lessons from the Novartis/Penn partnership and advance multiple CAR-T therapeutics for unmet needs in oncology.

Mustang Bio CEO Manuel Lichtman

Source: Fortress Biotech Inc.

"For two years, I led the collaboration between Penn and Novartis," the exec told Scrip. "We're following that model, which is that the licensor files the first [investigational new drug (IND) application] and actually conducts the first clinical trial at the institution. They manufacture there, [including] the lentivirus; they do the cell processing and they treat the patients there under their IND. Then, as soon as there's interesting and exciting clinical data, and as soon as we have our manufacturing set up, we would start under our IND," as they couldn't treat patients under the licensor's IND.

Mustang initially licensed rights to MB-101, an interleukin 13 receptor subunit alpha 2-specific CAR (IL13Rα2), and MB-102, which targets CD123. The first program is proceeding in a City of Hope (COH)-run Phase I study in two types of brain cancer, while the second is in Phase I for acute myeloid leukemia (AML).

The June 5 expansion of the partnership gave Mustang rights to a HER2-specific candidate for glioblastoma multiforme (GBM, one of the two brain tumor types in which MB-101 is under investigation), a CS1-specifc candidate for multiple myeloma, and a prostate stem cell antigen-directed candidate for prostate cancer, which also could be applicable to gastric, bladder and pancreatic cancer. [See Deal] Lichtman said Mustang's goal is that all five programs will be in the clinic before the end of 2018.

Prioritizing Five Early-Stage Programs At Once

Asked how a start-up can prioritize five programs in a relatively new modality at the same time, Lichtman explained that there is some synergy among the programs. For example, the HER2 asset gives Mustang a second way to go after glioblastoma multiforme.

"Obviously, we thought very carefully about bringing in three new programs and expanding the pipeline," he said. "There's a certain synergy here, especially if you look at HER2, a target with which we can create a dual CAR-T for GBM. HER2 is a glioblastoma multiforme target although it's better known as a breast cancer target. But our and City of Hope's major interest at this point is to prevent antigen escape in treatment of glioblastoma multiforme with CAR-T. We think this is a great pipeline and with the money we raised and closed on in January 2017, we think we can fund things fully."

Mustang netted $94.5m in a Series A financing from undisclosed investors earlier this year, and Fortress Chairman and CEO Lindsay Rosenwald estimates that that cash provides Mustang with about three years of runway. [See Deal]

Mustang is "going to be a publicly traded entity in a couple of months, and certainly we expect lots of news flow and we will selectively take opportunities to raise capital in the future, whether through the capital markets or through partnerships," he added.

Lichtman said the point at which Mustang likely will take over the two current clinical programs and run its own multi-center trials should be by the third quarter of 2018. MB-102 will be investigated specifically for its potential in a subset of CD123+ AML patients, an ultra-orphan indication called blastic plasmacytoid dendritic cell neoplasm (BPDCN). In order to get FDA approval to run its own clinical trials, it would have to demonstrate manufacturing capacity for the product, and while Mustang could do so by outsourcing the work to a CRO or cell-processing facility, it instead has elected to build its own manufacturing capabilities.

Although currently small in terms of head count and enmeshed in the Fortress infrastructure, Rosenwald asserted that Mustang is not a "virtual" company and that it shares in his vision for Fortress subsidiaries to become fully integrated biopharmaceutical companies. While Rosenwald and Lichtman work out of the same offices in New York, Mustang is building out its manufacturing site in Waltham, Mass., but for now is accessing Fortress's clinical, regulatory, legal, accounting and manufacturing personnel, he said.

"It's a fully functioning biopharma company in the CAR-T space with its own employees and access on a shared basis to all of the Fortress employees," Rosenwald explained. "Eventually, as Mustang grows and evolves, they will end up with their own everything, but in the formative years this keeps the costs lower, because it's a much more efficient way to operate, thus creating less dilution for shareholders. But at some time, they will spin out as their own company."

Future Partnering Potential With Checkpoint Therapeutics

One specific way Mustang will benefit from being part of Fortress will be the near-seamless ability to conduct combination studies with assets owned by the parent company's other immuno-oncology start-up, Checkpoint Therapeutics Inc.

"We think that's a huge advantage, because number one, when we go ahead to plan our preclinical and clinical trials, we don't have to ask [other companies] for their products, we have our own and we think that will give us a chance to move very, very quickly," Rosenwald told Scrip. "Certainly, I've worked many times in partnerships with other companies and it always slows down the process because it's not always easy to get together and agree on everything quickly."

Lichtman indicated that the two firms have plans around assets already in-house or to be acquired that have not yet been disclosed, noting that focus areas will include making CAR-T therapies work better. This work will include a focus on the tumor microenvironment, as well as the issue of antigen escape and the possibility of relapse, which he called the "Achilles heel" of CAR-T therapy.

This is why Mustang is pursuing a dual-CAR-T approach in GBM, he explained, because one responder in COH's Phase I trial of MB-101 showed less expression of IL13Rα2 at the end of treatment. A dual approach also might improve the drug's response rate, he said, because many patients will not have 100% expression of IL13Rα2 or HER2 on all of their tumor cells.

For now, Mustang does not do its own discovery, a characteristic common to all Fortress portfolio firms, by design. But, in the longer term, the company could end up performing its own early research, Rosenwald said.

"There are plenty of really incredible drug development candidates out there that we can license," he pointed out. "We have over 20 people in our [Fortress] business development team, that grows almost every month, and we see a huge potential pipeline of opportunities so there's no reason to do discovery on our own at this point in time."

"I would say that as an individual subsidiary like Mustang grows and succeeds, I wouldn't be surprised if someday they do some of their own work, but that's not our core competency," Rosenwald continued. "Our core competency is finding important development candidates for unmet medical needs that have been developed elsewhere [whose sponsors] would be glad to use Fortress and its subsidiary concepts to further develop those programs."

From the editors of Start-Up