Treg cell therapies are at the forefront of a collaboration between Regeneron (Nasdaq:REGN) and privately-held Sonoma Biotherapeutics, as they work together to discover, develop, and commercialize novel therapies for autoimmune diseases. This partnership combines Regeneron’s VelociSuite technologies with Sonoma Biotherapeutics‘ expertise in gene-modified T cell (Treg) therapies.

Under the terms of the agreement, Regeneron will pay Sonoma Biotherapeutics $75 million upfront, including a $30 million equity investment. Sonoma also stands to receive an additional $45 million development milestone payment. The parties will equally co-fund research and development for product development and will equally split future commercial expenses and profits.

REGN shares were up half a point to $824.46 in midday trading after announcing the news.

Joint research focus on Treg cell therapies

The collaboration will focus on Treg cell therapies for the inflammatory bowel disease subtypes ulcerative colitis and Crohn’s disease. They will also work on two undisclosed indications. Regeneron has an option for a fifth indication. Regeneron will have the option to lead late-stage development and commercialization on all products globally. Conversely, Sonoma will retain rights to co-promote products in the U.S. Sonoma will retain full ownership of its lead cell therapy candidate, SBT-77-7101, and other programs in development.

Focus on autoimmune disease treatment

Treg cells play a vital role in maintaining immune system balance and promise a paradigm-shifting approach to treating autoimmune and inflammatory diseases. Emerging research indicates that enhanced that the cells work directly at the site of inflammation and may provide a durable response. The potential benefits of the cell therapy subtype include targeted treatment, fewer side effects and long-lasting remission. Potential risks, however, may involve complications related to immune suppression, infection and challenges in regulating Treg cell activity.

Dr. Jeff Bluestone, co-founder and CEO of Sonoma Biotherapeutics, expressed excitement about the collaboration in a press release, noting that the partnership brings together Regeneron’s technological and clinical strengths and Sonoma Bio’s exclusive Treg platform and research capabilities to create therapies that may restore immune system balance and potentially cure diseases.

Similarly, Dr. George D. Yancopoulos, president and chief scientific officer of Regeneron, conveyed his enthusiasm for the partnership, highlighting the promising potential of engineered Treg cell therapies and the combined expertise of both companies in advancing treatments for autoimmune and inflammatory conditions.

Competitive landscape and related moves

There have been some other recent deals involving Treg cell therapies in 2023. For example, Quell Therapeutics raised $156 million in an oversubscribed Series B financing to advance its pipeline and platform of multi-modular engineered Treg cell therapies for various indications, including organ transplantation, autoimmune diseases, and neuroinflammation. Another example is Coya Therapeutics, which strengthened its leadership team with the addition of Arun Swaminathan as chief business officer to lead its business development and corporate strategy for its allogeneic Treg cell therapy platform.

Additionally, Gilead Sciences (Nasdaq:GILD) and its cell therapy subsidiary, Kite Pharma, have been developing Treg-based therapies for autoimmune diseases, including colitis and multiple sclerosis. Similarly, Sangamo Therapeutics (Nasdaq:SGMO) acquired the biopharma TxCell SA in 2018, aiming to develop Treg-based therapies for inflammatory diseases.