AlloVir’s IPO Raises $276M to Test Cell Therapies in Transplant Patients

AlloVir is the latest biotech company to go public, raising about $276.3 million to pull its cell therapies off the shelf and run multiple clinical trials testing them in stem cell and organ transplant patients.

On Thursday, Cambridge, MA-based AlloVir (NASDAQ: [[ticker:ALVR]]) priced its offering of 16.25 million shares at $17 apiece, the midpoint of its targeted $16 to $18 per share price range. The company was able to sell more shares than it planned, boosting the size of the stock offering from the initial target of 14.75 million shares. AlloVir shares opened at $20 apiece, up 17.6 percent from the IPO price.

AlloVir is developing cell therapies intended to treat and prevent viral infections in transplant patients. These patients have weak immune systems that make them particularly susceptible to infection. The standard of care includes antiviral drugs. But sometimes these drugs aren’t enough to stop viruses, and these treatments can damage the kidneys. Instead of taking viruses head on, AlloVir’s cell therapies are intended to restore the ability of a patient’s immune system to tackle them.

The AlloVir cell therapies are called virus-specific T cells, or VSTs. The process for making a VST therapy is similar to the way that CAR-T cancer treatments are produced. Immune cells are removed from the body and multiplied in a lab. But unlike CAR-T therapies, AlloVir’s process doesn’t engineer the cells in any way. The AlloVir cell therapies also don’t start with a patient’s own immune cells. The allogeneic approach uses the T cells of healthy people who have already been exposed to viruses. That exposure is expected to be enough get these cells to go after these viruses after the therapy has been infused into a transplant patient.

Once produced, AlloVir’s therapies can be stored and pulled “off the shelf” for use as needed. Speaking to Xconomy last year, company co-founder and Chief Scientific Officer Ann Leen, an immunologist at the Baylor College of Medicine, likened the process to growing an immune system outside of the body, and giving it to transplant patients at the first sign of infection.

The most advanced AlloVir product candidate, Viralym-M, is a VST that targets five viruses: BK virus, cytomegalovirus, adenovirus, Epstein-Barr virus, and human herpesvirus 6. The company is testing the cell therapy as a treatment for both stem cell transplant patients and organ transplant patients.

So far, Viralym-M has been evaluated in a Phase 2 clinical trial. According to the prospectus, the experimental therapy was given to 58 stem cell transplant patients whose infections had not responded to earlier antiviral treatments. The study was not designed to show statistical significance or that the VST was superior to antivirals. The proof-of-concept clinical trial was intended to show how the therapy works and whether it can be given safely.

In the study, 93 percent—54 patients—responded to the therapy in some way. A complete response, defined as the viral load returning to the range found in healthy people and resolution of the signs and symptoms of infection, was observed in 17 patients. Another 37 patients showed a partial response, defined as the viral load falling by half.

The therapy was well-tolerated by patients. The serious complications and patient deaths in the study were deemed unrelated to the AlloVir therapy. Graft-versus-host-disease, an immune response that is a known risk of stem cell transplants, was reported in 14 patients. A total of 23 patients in the study died. Preliminary clinical trial data were published in the Journal of Clinical Oncology in 2017.

There are no cell therapies approved for use in the US or Europe for treating or preventing the viral infections that AlloVir is targeting. But the company faces potential competition from South San Francisco-based Atara Biotherapeutics (NASDAQ: [[ticker:ATRA]]), which has advanced an allogeneic cell therapy called tabelecleucel to Phase 3 testing. That study is evaluating the therapy as a treatment for stem cell and organ transplant patients who develop Epstien-Barr viral infection along with post-transplant lymphoproliferative disease, a known complication of transplant procedures.

AlloVir was founded in 2013 based on technology developed in Leen’s research lab, which is part of the Center for Cell and Gene Therapy at Baylor. The company, which was initially named ViraCyte, is led by CEO David Hallal. Hallal is also the chief executive of ElevateBio, a Waltham, MA-based company that provides manufacturing services for cell and gene therapy companies and also invests in them. ElevateBio is AlloVir’s largest institutional shareholder, holding a 21.9 percent post-IPO stake, according to the prospectus. Prior to the IPO, the filing shows that AlloVir had raised $156.3 million, including a $120 million Series B round last year.

According to the prospectus, AlloVir plans to use the IPO cash to advance Viralym-M to a Phase 3 study testing it against hemorrhagic cystitis, inflammation of the bladder that is a virus-associated complication faced by stem cell transplant patients. The drug will also be tested in separate late-stage studies in cytomegalovirus and adenovirus. About $98 million is planned for those Phase 3 tests.

Another $83 million is earmarked for Phase 2 tests of Viralym-M. Those tests will cover the prevention of multiple viral infections in stem cell transplant patients, treating BK virus infection in kidney transplant patients, and treating cytomegalovirus infections in solid organ transplant patients.

The IPO cash will also support two respiratory virus programs. ALVR106 is being developed to treat respiratory syncytial virus, influenza, parainfluenza virus, and human metapneumovirus. That VST is expected to start Phase 1 tests in the second half of this year. The other respiratory virus program, ALVR109, is in development as a treatment for infection by the novel coronavirus SARS-CoV-2. The company plans to advance that program to Phase 1/2 testing.

Image: iStock/Jay_Zynism