$50m PE injection for Orgenesis’ cell therapy POC business

Cell and gene therapy (CGT) biotech Orgenesis has set up a subsidiary focused on streamlining its cell therapy point-of-care (POC) service offerings.

Metalmark Capital Partners will invest up to $50 million in Orgenesis’s POC subsidiary, Morgenesis, through an upfront investment of $30 million and two future investments of $10 million each, subject to certain milestones.

Morgenesis brings together the full range of Orgenesis’ advanced therapy POC options, including its Orgenesis Mobile Processing Units and Labs (OMPULs) platform, which are based on closed, automated processes.

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“We believe that our point-of-care services business will generate substantially more value for the company and that we are providing a unique service for this expanding industry,” Orgenesis CEO Vered Caplan said during her firm’s third quarter call last week.

“Our point-of-care platform addresses many of the key challenges facing the industry, including capacity constraints, excessive cost. As a result, we believe our model is uniquely positioned to address industry challenges through a highly innovative decentralized model which lowers cost seems line logistics and expand capacity.”

According to Vered, Morgenesis’ POC platforms offer a number of advantages in cell therapy manufacture including short setup times, a small footprint, and lower costs through automated operations, streamlined logistics, and parallel processing.

“In addition, we designed them with a scalable and modular format so we can add capacity as the needs of the hospital or biotech companies expand,” she told stakeholders, reducing implementation time for new capacity from up to 24 months to approximately three to six months.

“We believe our strategy of decentralizing and unitizing the supply of cell and gene therapies based on standardization of the manufacturing environment could ultimately become the solution for this industry, lowering the cost of the therapies to on-site processing and make these therapies more broadly available to patients.”

Investment strategy

“We believe this investment provides the necessary funding to accelerate the rollout of our point-of-care services business while minimizing dilution to existing stockholders given the current state of the public markets,” Vered said.

Furthermore, the private equity (PE) deal is similar in strategy to how Orgenesis grew its ex-subsidiary Masthercell. Orgenesis brought in US-based PE for the contract development and manufacturing organization (CDMO) before selling it to Catalent in 2020 for $315 million.

“The major difference here is that our revenues are already on par with where we were when we sold Masthercell.”