iBio (NYSEA:IBIO) announced it is seeking to divest its contract development and manufacturing organization, iBio CDMO, in order to complete its transformation into an antibody discovery and development company.
Proceeds and cost-savings from the divestiture of the CDMO facility and reduction in operations will be invested in advancing the company’s lead immuno-oncology assets towards the clinic, as well as the continued development of the RubrYc discovery engine, the artificial intelligence (AI) platform used to create the majority of iBio’s therapeutic candidates, and intended to extend the company’s cash runway.
“We currently possess valuable assets in both biomanufacturing and biotech,” said Tom Isett, CEO of iBio, said in a statement. “We believe focusing our efforts on drug discovery and development to be the path to greatest value-creation for shareholders, especially given the recent addition of RubrYc Therapeutics’ pipeline and tools to engineer precision-targeting antibodies,” he added.
In addition, given the strong demand for biomanufacturing capacity, “we are providing the opportunity for another organization to more fully utilize the advanced bioanalytical and bioprocess capacity resident in our large-scale cGMP biologics production facility located in the growing Southeast Texas Biocorridor,” Mr. Isett said.
iBio expects to complete the CDMO divestiture in 2023, while it focuses on advancing its lead preclinical program and expanding pipeline and partnership opportunities.
Following a detailed review of its pipeline and growth opportunities, iBio will focus its resources on the continued development of its lead immuno-oncology assets including, IBIO-101, an immunotherapy for the depletion of regulatory T- cells, and two differentiated, antibody candidates emanating from its antibody discovery platform, EGFRvIII and CCR8. In pre-clinical research, each demonstrates specificity for its target and a high degree of cell-killing capability, with potentially reduced off-target effects, the company said.
In order to fund further pipeline and platform development, he said a global life science transaction firm has been engaged to lead the sale of the assets of the CDMO. This includes the 130,000-square-foot cGMP facility, which is configurable for a variety of large-scale bioproduction systems and iBio’s proprietary plant-based FastPharming expression system and its Glycaneering technology.
The company expects it may be able to complete a transaction in 2023, although there is no assurance as to when, or for how much, iBio may be able to sell its CDMO assets.
In conjunction with the divestment, iBio has commenced a comprehensive workforce reduction of approximately 60% of the current company staffing levels, primarily focused on the workforce located at the cGMP facility in Bryan, Texas.
After the conclusion of the workforce reduction, the majority of the company is expected to operate out of a new drug discovery center in San Diego, which opened in September of 2022.
“While parting with members of our ‘WeBio’ team will be incredibly difficult, we do so with the knowledge that demand for their talents in the Texas Biocorridor area is high,” said Michael Jenkins, iBio’s VP, Operations.
“On behalf of the CDMO site leadership team, we thank our colleagues who have invested so much in our Bryan/College Station facility – and whose dedication to our mission has helped build the company and developed iBio’s proprietary FastPharming expression system and Glycaneering technology.”
The transition to a focused AI-biotech business is expected to reduce iBio’s monthly burn rate by approximately half, or $2.5-million to $3-million per month.
Assuming an asset sale at levels comparable with other similar cGMP facilities, the company believes that cost reductions in conjunction with proceeds from asset sales could provide cash runway into the first half of calendar year 2024.
iBio also said it will begin a search for a new CEO to replace Mr. Isett, who will continue as CEO through the transformation. William (Chip) Clark was appointed chairman by the board.
“On behalf of the board of directors, we want to thank Tom for his ongoing service to iBio. Tom’s experience will help us guide the company through this strategic transformation,” Mr. Clark said.