2023-07-04| Startups

Singapore’s Top-funded Biotech Start-up Announces Liquidation Following Failure of Fundraising

by Richard Chau
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Despite being backed by Singapore’s top investors including Temasek Holdings and the government-linked EDBI, Tessa Therapeutics Ltd. still failed to raise more capital to sustain operations and develop its cell therapies for cancers. As a result, this Singapore-based biotech start-up has announced to its shareholders the intent of initiating liquidation procedures in the near future.

Related article: Biotech Start-ups May Face a Foreboding Prospect Following Silicon Valley Bank (SVB)’s Unsuspected Collapse 

Tessa’s Existing Pipelines and Manufacturing Facility

Founded in 2001, Tessa is a clinical-stage biotechnology company developing next-generation cell therapies for both solid tumors and hematological malignancies, particularly engaging in R&D endeavors of CAR T-cell therapies. With the aim of overcoming the main obstacles in creating a novel allogeneic CAR T-cell therapy such as the potential risk of graft‐versus‐host disease (GvHD) in patients and limited persistence of infused CAR T cells due to the host’s immune rejection, the company has developed its proprietary virus-Specific T Cell (VST) platform, making use of specialized T cells produced during a viral infection that have the ability to recognize and kill infected cells. Previous studies have demonstrated that allogeneic VSTs are able to exhibit good safety profile and efficacy in early trials, with lower risks of graft rejection and GvHD in patients.

One notable example is TT11X, an allogeneic “off the shelf” CD30.CAR-modified Epstein-Barr virus-specific T-cell (EBVST) therapy in treating relapsed or refractory (R/R) Hodgkin lymphoma with cancer cells expressing the CD-30 protein. Phase 1 data showed an overall response rate of 78% without developing serious adverse events such as neurotoxicity and GvHD. Last September, TT11X even won recognition in the “Most Promising Off-the-Shelf Therapies” category at the Asia-Pacific Cell & Gene Therapy Excellence Awards 2022

Tessa’s other leading pipelines include TT11, an autologous CD30 CAR T-cell therapy for R/R Classical Hodgkin lymphoma, as well as TT16, a combination therapy utilizing HER2-specific autologous CAR VST and an oncolytic virus. This Singapore’s home-grown biotech company also has a GMP facility that supports the manufacturing of autologous and allogeneic cell and gene therapy products. The facility is also able to meet product registration requirements from the U.S. Food and Drug Administration, European Medicines Agency and other key regulators in Asia.

Tessa Has Made Big Moves In Recent Years, Raising Over $250 Million In Multiple Funding Rounds

Over the past few years, Tessa has undertaken several fundraising rounds to gather capitals for operation and expansion. For instance, in December 2017, the company successfully closed a $80 million private equity financing round led by Singaporean state-owned Temasek Holdings, and joined by EDBI, Karst Peak Capital, Heliconia, Heritas and other investors. Later in April 2018, a further $50 million was raised from undisclosed investors due to additional demand in the said funding round.

Tessa’s latest fundraising success came in June 2022, in which the Singaporean biotech raised $126 million in a Series A financing round led by Polaris Partners, a US-based biopharma and healthcare venture capital firm, with participation from existing investors. The aggregate amount of funds raised exceeded $256 million. In addition, in June 2019, Tessa attempted to expand its cell therapy development business in China by investing $120 million to establish a joint venture with China-Singapore Guangzhou Knowledge City (CSGKC) in order to conduct clinical trials for its CAR T-cell therapies in China.

Concerns May Arise Over Asset Disposal Following the Sudden Fall of Singapore’s Biotech Rising Star 

The announcement of Tessa’s impending liquidation came rather unexpectedly, with little media coverage outside of Singapore to date, nor has the company issued an official press release to reveal its decision. A letter issued by Tessa to shareholders, quoted by local media, said the company’s board had agreed to cease operations after a market downturn hampered efforts to raise more capital or secure a strategic buyer.

As a Singaporean biotech company supported by state-owned institutions, Tessa’s sudden closure raises questions about its asset disposal and poses challenges to Singapore’s growing biotech ecosystem. The fundraising struggles of other biotech start-ups could have implications on venture capital funds and their investment decisions amid the current political and economic climate. Monitoring the situation is crucial to understanding any potential effects on other biotech companies. Yet, this incident also offers an opportunity for the ecosystem to reassess strategies and strengthen resilience.

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