Harvard Pre-Med Turned-Banker Plots IPO for U.K. Biotech

Photographer: Peter Dazeley

Immune therapy. Close

Immune therapy.

Photographer: Peter Dazeley

Immune therapy.

Gregg Sando left a career in investment banking almost a decade ago to return as a 46-year-old to a student life filled with science lectures and pub outings. The move is paying off.

Today he is chief executive officer of Cell Medica Ltd., a U.K. biotechnology startup poised to tap into the fast-growing field of immune therapy, treatments that deploy the body’s natural defenses to fight disease.

Companies including Bristol-Myers Squibb Co. and Roche Holding AG have created drugs that use the approach to treat cancer. Sando wants to raise $75 million next year, possibly in an initial public offering, to fund Cell Medica’s development of therapies to prevent infections in people undergoing bone marrow transplants and treat cancers related to Epstein Barr virus.

Sando, who took pre-med courses as a Harvard undergraduate studying biochemistry, quit as London-based global head of financial institutions at Deutsche Bank AG to resume his science studies at Imperial College London in 2004. A year later he earned a master’s degree in immunology and started his company.

“When we met him, we thought ‘He’s a banker, we’re not quite sure,’” said Maina Bhaman, a Cell Medica board member and director of health-care investments at Imperial Innovations Group Plc (IVO), a U.K. company that invests in technology spawned at universities. “We don’t get a lot of bankers. But he surrounded himself with people we respected and knew.”

Biotech Rally

“Seventy-five million dollars is the upper edge of a private fundraising, but the midpoint for an IPO,” Sando said in an interview at the company’s offices in a loft-style, canal-side building near King’s Cross station in north London. “The public markets always give you a higher valuation and there’s less dilution for existing investors.”

The markets may be receptive: Biotechnology stocks have soared this year as companies demonstrated commercial success with new drugs, investors speculated on takeovers and ultralow interest rates triggered demand for riskier investments. Companies have capitalized on the rally, with biotechs raising $8 billion globally through stock offerings in 2013, up 82 percent from $4.4 billion for all of last year.

Backers including Imperial Innovations, Invesco Perpetual and the Wellcome Trust have invested $27 million in the company. It has enough cash to last until the end of 2014, Sando said. London-based Imperial Innovations will consider further investment, Chief Investment Officer Nigel Pitchford said.

Immune System

In Cell Medica’s therapies, a blood sample is taken from a patient, and the T cells that fight disease are isolated and grown in a production facility using its proprietary processes. The cells are returned to the patient to help reconstitute his or her immune system.

Cell Medica has submitted data that it expects to present at a conference in February from a mid-stage study of patients who received its Cytovir CMV treatment to prevent infections with cytomegalovirus after bone marrow transplants. Data from a final-stage study will be available in the third quarter next year, Sando said. Cell Medica also is developing Cytorex EBV, a treatment for cancers tied to Epstein Barr virus.

Cytovir CMV will cost about 20,000 pounds ($32,770) and Cytorex EBV will have a price tag of about 35,000 pounds, Sando said.

Getting the treatments through development and winning regulatory approval aren’t the only hurdles. The company also must convince insurers and governments to pay for the products.

Viruses’ Role

The delivery of the therapy also is more complicated for doctors than a simple pill or injection. Dendreon Corp., for example, has struggled to sell a prostate cancer immunotherapy called Provenge, which costs $93,000 and involves extracting white blood cells from a patient, mixing them with vaccine components and delivering the combination as an infusion.

Still, Cell Medica’s treatments have potential to be more effective with lower side effects than existing treatments, and the technology may eventually prove to be useful in other cancers in which viruses play a role, says Paul Moss, a University of Birmingham hematologist and adviser to the company.

Drugmakers that have traditionally focused on “small-molecule” medicines in tablet form or “large-molecule” antibody treatments have overlooked the type of whole-cell therapy that companies such as Cell Medica are developing, Moss says.

Getting Funding

“That is now changing and Cell Medica has a very good platform to lead this introduction,” said Moss.

After receiving his degree in 2005, Sando founded the company and, with some of his teachers, obtained 2 million pounds of funding from the Wellcome Trust charitable foundation. Imperial Innovations also stepped in.

It was an unusual move for a student, especially one with Sando’s background, Bhaman says. Most requests to seek Imperial Innovations’ help for a life-sciences project come from professors with years of laboratory experience.

“I’d always thought I’d wanted to go into science,” Sando said. “I could have gotten into venture capital but I wanted to get directly involved. I thought I would find a subject.”

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To contact the reporter on this story: Andrea Gerlin in London at agerlin@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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