ImmunityBio and NantKwest to Merge, Creating a Leading Immunotherapy and Cell Therapy Company

IndustryPRwire — ImmunityBio and NantKwest, Inc announced they have entered into an agreement to merge in a stock-for-stock transaction. The combination will create a leading immunotherapy and cell therapy company focused on oncology and infectious disease.

Together, ImmunityBio and NantKwest will have a broad, clinical-stage pipeline – including 13 assets in clinical trials and 11 in Phase II to III – as well as a robust early stage pipeline to address other difficult to treat cancers. The combination of NantKwest’s Natural Killer (NK) cell platform and ImmunityBio’s immunotherapy fusion protein, immunomodulator, and adenovirus platforms have already resulted in complete responses in late stage, difficult to treat metastatic cancers. To date complete responses have been noted in patients with second line or greater metastatic pancreatic cancer, triple-negative breast cancer, head and neck cancer, and Merkel Cell Carcinoma. This strong track record of combination immunotherapies across the two companies’ platforms supports the potential of the combined assets to transform the future of immunotherapy beyond checkpoints by synergizing NantKwest’s cell-based therapies with ImmunityBio’s immunotherapy platforms.

In a separate press release issued today, ImmunityBio announced that ImmunityBio’s IL-15 fusion protein, Anktiva, with FDA Breakthrough Therapy status for non-muscle invasive bladder cancer CIS, has achieved primary endpoint with 72% complete response.

ImmunityBio was founded by Dr. Patrick Soon-Shiong, MD, a physician and scientist who invented Abraxane for the treatment of metastatic breast cancer, lung cancer and advanced pancreatic cancer. The companies, including their operations, are aligned given their long-standing collaboration programs with opportunity for advancing clinical development of the late stage Phase II and III trials.

Dr. Soon-Shiong said, “We are developing next-generation immunotherapies to defeat cancer and infectious disease. By combining ImmunityBio’s immunotherapy platform, which includes the Anktiva IL-15 superagonist, with NantKwest’s natural killer cell platform, the merged entity will have a powerful and broad product portfolio that can activate both the innate (natural killer cell and macrophage) and adaptive (T cell) immune systems to create long-term immunological memory. What distinguishes the merged entity is the late stage immunotherapy product pipeline that is designed to eliminate the need for high-dose chemotherapy, improve the outcomes of current CAR T cell therapies, and extend beyond checkpoint inhibitors. With 13 clinical trials across multiple tumor types at Phase I to III and with the combined talent in research, clinical development and manufacturing, the merged entity is poised to be a leader in the immunotherapy space.”

“We are excited to join forces with ImmunityBio, a company and team we have collaborated with for many years across our platforms,” said Rich Adcock, NantKwest Chief Executive Officer. “With the integration of ImmunityBio’s pipeline, cutting-edge R&D capabilities, talented employees and clinical expertise, we expect to accelerate the delivery of new treatments for patients with unmet needs. Together we can unlock the combined potential of our assets, and look forward to building on our continued success as one company.”

Michael Blaszyk, an independent director of NantKwest and member of the Special Committee stated, “This transaction is a compelling opportunity to drive value creation for shareholders. Our Special Committee carefully evaluated the ImmunityBio proposal and determined it is in the best interests of shareholders and also benefits other stakeholders, including our employees, partners and patients.”

ImmunityBio is a leading late stage immunotherapy company activating both the innate (natural killer cell and macrophage) and adaptive (T cell) immune system to treat serious unmet needs within oncology and infectious diseases. Founded in 2014 and headquartered in Culver City, ImmunityBio’s platform is designed to overcome limitations of the current standards of T cell-based immunotherapies, including checkpoint inhibitors and CAR-T cells. The company has established a robust next generation immunotherapy clinical pipeline with a strategy toward registrational intent in various indications, beyond checkpoint therapy treatment alone.

Strategic and Financial Rationale

Key attributes of the combined company will include:

  • Expansive clinical-stage pipeline and intellectual property portfolio. 13 assets in clinical trials, including 11 in Phase II to III clinical trials, as well as a strong global intellectual property portfolio of issued and pending worldwide patent applications with patent life extending to 2035 and beyond.
  • Differentiated technology and assets. Best-in-class combined discovery and development platforms for novel therapies and next-generation early-stage candidates across immunotherapy, neoepitopes and molecules enhancing allogeneic and autologous NK and T-cell therapies.
  • Significant market opportunity. Well positioned to combine expertise, platforms and resources to address patients across oncology and infectious disease.
  • Cutting-edge cell manufacturing expertise and ready-to-scale facilities. Extensive and seasoned R&D, clinical trial, and regulatory operations and development teams, which together will occupy over 200,000 square feet of manufacturing and R&D facilities.
  • Improved ability to combine platforms and therapies. The transaction improves the ability to more seamlessly combine programs and leverage resources and expertise across both companies’ platforms, ultimately strengthening the efforts of both companies on behalf of patients to drive better outcomes in the fight against oncology and infectious disease.
  • Significant potential for strategic and financial synergies. This opportunity will come from meaningful streamlining of clinical operations, therapeutic discovery and development, and manufacturing. 

Transaction Details

The transaction is structured as a tax-free 100% stock-for-stock merger, with ImmunityBio to reverse merge with NantKwest. Under the terms of the agreement, ImmunityBio shareholders will receive a fixed exchange ratio of 0.8190 shares of NantKwest for each share of ImmunityBio owned. Upon completion of the transaction, on a fully diluted basis, ImmunityBio shareholders will own approximately 72% of the combined company and NantKwest shareholders will own approximately 28% of the combined company, on a fully diluted basis.
A Special Committee of the NantKwest Board of Directors, consisting of independent Directors, undertook a thorough review of the transaction and unanimously recommended that the company proceed with the transaction.
The transaction, which is expected to close in the first half of 2021, is subject to shareholder approval by a majority of unaffiliated shareholders of NantKwest, in addition to other customary closing conditions. There is no filing requirement under the Hart-Scott-Rodino Antitrust Improvements Act for this transaction.
Following the closing of the transaction, the combined company will assume the ImmunityBio name and continue to be listed on the NASDAQ exchange. However, the combined company ticker symbol is expected to be changed to IBRX.

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