Durham gene editing firm strikes big deal; it’s ‘right-sized;’ 80 employees exit

DURHAM – A big licensing deal potentially worth hundreds of millions of dollars with an Austrlia-based company at the same time also has triggered what Precision Biosciences calls a “right-sized” organization of the company.

“Prior to the announcement, we had 190 employees, with 110 going forward with Precision. Most of the 80 employees went with Imugene, with the remainder parting ways with a reduction in force,” Mei Burris, director of investor relations and finance for the company,” told WRAL TechWire.

What “right-sized” means was not immediately explained in the company’s announcement Tuesday night after the markets closed. The company’s stock is trading at under $1 and it lost $12 million in its most recent quarter ending June 30.

Precision is a clinical stage gene editing company using a proprietary system called ARCUS to create gene editing therapies. The company was spun out of Duke University in 2006 and went public in March 2009. The firm also has struck deals in the past with Eli Lilly and with Novartis.

“As a result of this transaction, Precision expects to reduce its annual operating spend by approximately $20 million from the current base case and has right-sized the company to operate as a single platform company focused on in vivo gene editing,” Precision said in the deal announcement.

Its partner in the deal is Imugene Limited (ASX: IMU).

According to an SEC filing some Precision workers will be offered jobs with Imugene. [“As part of the Purchase Agreement, Imugene is required to make an offer of employment to certain employees of the Company who are associated with the Company’s CAR T cell therapy business,” the filing says.]

‘Inflection point’

Precision has licensed global rights to its lead product that targets cancer. Imugene also has the option to develop three other cancer programs.

Precision gets $21 million up front in cash and equity for rights to the technology. Another $8 million could come in the near future based on progress in the program. Another $145 million and future royalties are possible.

For each of the three other programs that could be licensed Precision would receive $145 million, the company said.

“We are excited to reach this key inflection point for Precision BioSciences with the achievement of three milestones – first, the completion of a global deal with Imugene for azer-cel in cancer; second, the extension of our expected cash operating runway to greater than two years; and third, our pivot to focus exclusively on in vivo gene editing,” said Michael Amoroso, Precision’s CEO, in the announcement. “We are very pleased to partner with Imugene as they plan to leverage azer-cel’s clinical data package and recent regulatory feedback to continue its path toward a pivotal trial in LBCL and potentially help patients in dire need. Our commercial and scientific interests are closely aligned, and we believe Precision’s allogeneic CAR T technology can complement the novel oncology approaches being pursued by Imugene, especially its OnCARlytics platform for solid tumors.”

As of June 30, Burris said the company had a “cash balance was $138M as of June 30, 2023. With the purchase agreement upfront payment, we received $8M in cash and a $13M convertible note receivable.”