June 9 Quick Takes: U.K. Treg play Quell finds first partner in AZ

AstraZeneca plc (LSE:AZN; NASDAQ:AZN) continues it recent foray into cell therapies after the pharma paid London’s Quell Therapeutics Ltd. $85 million up front as part of an exclusive option and license agreement to develop and commercialize Treg cell therapies to treat Type I diabetes and inflammatory bowel disease (IBD) indications. It’s the first deal for well-funded Quell, which has raised $240.6 million in venture financing to fund development of its thymically-derived, engineered Tregs. It is the second major deal in the Treg space, after Sonoma Biotherapeutics Inc. partnered with Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) earlier this year to develop Tregs for autoimmune diseases.

The majority of AZ’s $85 million upfront payment is cash, plus an equity investment in Quell. The biotech is eligible for over $2 billion in development and commercialization milestones, plus tiered royalties. Quell also retains an option to co-develop Treg cell therapies for Type I diabetes in the U.S., which would increase Quell’s potential milestone payments and royalty rates...