Atara Biotherapeutics Inc. will enter a long-term manufacturing agreement with Fujifilm Diosynth Biotechnologies, a subsidiary of Japan-based Fujifilm Corp. that is also set to acquire Atara’s Thousand Oaks cell therapy manufacturing facility for $100 million under the deal.
The manufacturing agreement, which could extend up to 10 years, will see Fujifilm provide Atara with the capacity and capability needed to manufacture its clinical and commercial-stage allogeneic cell therapies. Fujifilm will do so by taking on manufacturing duties of Atara products in a reserved suite within the soon-to-be-acquired 90,000-square-foot facility at 2430 Conejo Spectrum St.
Atara is currently leasing the facility from Rexford Industrial Realty, according to Haider Alawami, economic development manager for the city of Thousand Oaks. He wrote in an email that the acquisition is purely for the facility’s operational and manufacturing capacities, not the physical building. Rexford purchased the entire Conejo Spectrum Business Park in 2019 for $106 million.
The facility hosts 140 manufacturing and quality workers. At the closing of the deal, they will be offered positions by Fujifilm.
Back to research
Atara, which is headquartered in South San Francisco but maintains its facilities in Thousand Oaks, produces allogeneic T-cell immunotherapies that treat or aim to treat Epstein–Barr virus-associated rare diseases, multiple sclerosis, solid tumors and B-cell malignancies. The company’s furthest developed product is Tab-cel, which is under regulatory review in Europe.
According to Yahoo Finance, the company has 578 employees, so the Fujifilm deal will peel away about one-fourth of its workforce.
Atara Chief Executive Officer Pascal Touchon said that Atara will focus its capital resources on the development and commercialization of its drug pipeline.
He explained that the strengthening of Atara’s manufacturing productivity through the last few years played a large role in the manufacturing partnership with Fujifilm. For example, one of its newest products that aims to treat multiple sclerosis can now have up to 20,000 doses made per batch. The cell therapies Atara produces can also be cryopreserved, or frozen at extremely low temperatures, yielding longevity for an already stable supply.
“The more we progress, the less we need to have full-time manufacturing units that work 365 days, 24/7,” Touchon said. He added that Atara was seeking a partner that would give the company the capacity to make a batch when needed and when not needed, the partner would be able to focus on other duties.
“That’s not only good for us because it’s less cost and better use of capital, but we can also invest in research,” Touchon said. “At the same time, it’s good for the partner because they have the ability to operate the state-of-the-art facility with the amazing talents that are making these products.”
Fujifilm’s acquisition of the facility will not zero out Atara’s presence in Thousand Oaks, as it will retain its recently established Atara Research Center at 2380 Conejo Spectrum St. The research center is fully operational and will house Atara’s pre-clinical, translational sciences, manufacturing process sciences and analytical development teams.
“That’s also very important that we are continuing our investment in manufacturing science for cell therapy, where much progress still needs to be made,” Touchon said, adding that Atara plans to continue recruiting people for manufacturing science positions.
Rare deal
Brent Reinke, the founder, director and chairman of the Westlake Village-based Bioscience Alliance, said that the transaction between Atara and Fujifilm is an example of an outsourcing of functions trend that has been going on in the life sciences industry for a few years.
The facility acquisition is not particularly common in the local area according to Reinke, who attributed its rarity to the fact that few local biotech firms have built their own manufacturing plants.
He added that there is value for Atara to take the overhead of operating the facility and push it off to a third party, while also raking in the money from the facility’s acquisition.
“There’s pluses and minuses – sometimes, you don’t have the same level of control because it’s now a third party doing the work,” Reinke said. “There is a benefit, cost savings, to letting third parties do it, and then they can take the savings and then in this case, cash that was paid for the facility and put it into other uses.”
Fujifilm’s global manufacturing footprint will be expanded to the West Coast with the facility’s acquisition, complimenting other locations that support the advanced therapy market in Texas and Massachusetts.
“Through this acquisition Fujifilm can extend its CDMO (contract development and manufacturing company) offering to advanced cell therapies,” Teiichi Goto, Fujifilm’s chief executive, said in a statement. “Going forward, Fujifilm will, by providing a stable supply of high-quality biopharmaceuticals, further advance establishing tomorrow’s medicines that fulfill unmet medical needs.”
Fujifilm was one of several suitors interested in the facility, according to Touchon, who said that Atara was happy with Fujifilm’s financial background and capabilities. Particularly, there were two factors that Touchon was impressed with.
Fujifilm will use the Thousand Oaks facility as the main center of excellence for their cell therapy business, according to Touchon.“So, their intent is to expand the site, not only to operate for Atara but to operate for others, so that’s going to be good for us and for the community,” he said.