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Pfizer Inks New CAR-T Deal, In Talks With P&G for Unit Sale

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Pfizer Inc. (PFE - Free Report) announced that it has formed an alliance with private biotech, Allogene Therapeutics, to expedite the development of its allogeneic CAR-T therapy.

San Francisco-based Allogene is co-founded and led by former executives of Kite Pharma, which was acquired by Gilead (GILD - Free Report) for $12 billion last year. Pfizer will own a 25% stake in Allogene and also get a representation on the latter’s board.

Per the deal, Allogene will assume from Pfizer the rights to 16 preclinical CAR-T assets, which Pfizer in-licensed from French companies, Cellectis and Servier. In addition, Allogene will also gain rights to a phase I candidate, UCART19, which Pfizer developed in partnership with Servier. UCART19 is an allogeneic CAR-T therapy that has the potential to be developed for the treatment of CD19-expressing hematological malignancies. It is presently in a phase I study for acute lymphoblastic leukemia (ALL) while phase II studies are expected to be initiated next year by Allogene and Servier.

Allogeneic CAR-T therapies, a potentially revolutionary cancer treatment approach, are developed from cells of healthy donors and stored for “off-the-shelf” use in patients. This approach eliminates the need to create personalized therapy, thereby reducing the time patients must wait for treatment.

Focus on the CAR-T area has increased with last year’s FDA approval of therapies such as Novartis’ (NVS - Free Report) Kymriah and Gilead’s Yescarta. These treatments have huge commercial potential and could well change the treatment paradigm.

CAR-T falls under the ambit of cellular immunotherapy, which involves using a patient’s own immune cells to attack and get rid of harmful disease cells in the body. The CAR-T approach involves the collection of a patient’s T cells, their genetic modification outside the body, the incorporation of specific receptors targeting cancer cells and finally, the re-infusion of the modified T cells back into the patient.

It goes without saying that many drug/biotech companies are looking to boost their pipeline with such drugs.

Meanwhile, per a CNBC report, Pfizer is in talks with consumer giant Procter & Gamble (PG - Free Report) regarding the sale of its Consumer Healthcare segment

Last October, Pfizer had said that it was exploring strategic alternatives for its Consumer Healthcare segment including a partial or a full separation through a spin-off, sale or other transaction. A decision regarding the same is expected to be made this year and it may ultimately opt to retain the business.

However, Pfizer is having trouble finding a buyer for the same. Last month, London-based pharma/consumer giant Glaxo, which was considered a frontrunner to bid for Pfizer’s unit, withdrew from the race to buy Pfizer’s Consumer Healthcare segment. (Read more: Glaxo Drops Bid for Pfizer Unit, Shingrix Gains EU/Japan Nod).

British company, Reckitt Benckiser Group also pulled out of the discussion with Pfizer to buy the same unit.

Following the recent developments, Pfizer’s shares were up 1.8% on Tuesday. Shares of Pfizer have declined 0.6% so far this year compared with a 4.6% decrease for the industry.

Pfizer carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

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