Acquisition Brings Happy Valley Immunomagnetic Cell Selection Company onto World Stage

February 9, 2021

BioMagnetic Solutions’ ‘exquisite process’ selects T cells for genetically engineered CAR-T cells that seek out malignant cancer cells to improve treatment for blood cancers

“It’s such a great sense of pride, knowing this will change human healthcare history. To give companies the tools to make such eloquent changes in cells. Knowing that we can make such an impact … this part is so much fun. Partnering with KKR’s Gamma Bioscience to get there… It’s a storybook thing. We couldn’t have found a better partner in Gamma Bio to help us get our cell selection technology to market.” That’s how BioMagnetic Solutions COO and co-founder Ted L. Liberti describes the company’s January acquisition by Gamma Biosciences, a life sciences tool platform created by global private equity firm KKR, in a multimillion dollar deal.

Paul A. Liberti

BioMagnetic Solutions’ revolutionary immunomagnetic technology products are about to hit the world stage, changing cell and gene therapy as it exists today, significantly improving treatment for blood cancers. Ted says that the groundbreaking deal is testament to the pioneering work his father, BioMagnetic’s CEO and chief scientific officer Paul A. Liberti, did in the field of immunology over the course of five decades. “His technology, ideas, IP and tenacious persistence made today’s KKR Gamma Bio deal possible,” Ted says. 

The multimillion dollar deal centers around BMS’ work in immunomagnetic cell selection based on the principle of using antibodies or other affinity ligands attached to magnetic particles. Here’s how it works.

Like Goldilocks, BMS’ ferrofluids are just the right size

Ted Liberti was on a PhD track at PSU’s Smeal College of Business to become a professor and had spent six years with Ben Franklin Technology Partners’ University Park team before he joined his father to create BioMagnetic Solutions. His love of teaching is evident when he explains how magnets can be used to separate cells from blood and tissue. “Our nano magnetic liquid beads are called ferrofluids,” he says. “Their nano size gives them colloidal properties. That size gives them energetic fluid-like properties — as they dance around infinitely, always seeking their next meal.”

“My father invented these nanoparticles in the late 1980s. They have a small nano size, constant Brownian motion and a highly magnetic mass that allows them to latch on to targeted components better than any competing particles. Their ‘not too big, not too small’ properties have earned them the nickname ‘the Goldilocks Particle.’”

“Our company really fits Happy Valley,” he says. “We had the choice to use venture capitalists, but we decided, no, let’s keep it here. Let’s fund it from corporate partnerships and involvement from Centre County. So we did.” 

With the development of BMS’ X-GRAFFE cell separation device, a patient’s T cells can be purified from their immune system cells. These isolated T cells can then be genetically engineered to target and destroy a patient’s cancer in a process called adoptive cell therapy. This “exquisite CAR-T process,” as Ted calls it, retrains T cells to seek out single malignant cancer cells in the paradigm-changing field called CAR-T cell therapy, first pioneered in Philadelphia at University of Pennsylvania by Dr. Carl June and colleagues.

Starting BioMagnetic Solutions: A testament to Happy Valley’s tech ecosystem

BioMagnetic Solutions was started in 2012 with the goal of developing next-generation ferrofluids and finding better ways to do magnetic cell separations for isolating circulating tumor cells (CTC) and platforms for isolation of relevant cells for clinical adoptive cell and gene therapy, but it was not Dr. Liberti’s first foray into ferrofluids. By the time BioMagnetic Solutions was born, he’d amassed over 64 patents, already had a career in academics and launched and sold his previous immuno-magnetics biotech firm.

In 1984, he started Immunicon, which would become a premier, worldwide biomagnetic firm over the next several decades. Led by his discoveries, inventions and management, the company developed the field of circulating tumor cells (CTC) with CELLSEARCH, the world’s only FDA-approved system for detecting CTC in clinical samples. In 2008, the company was acquired by Johnson & Johnson and the field of today’s liquid biopsies all started with CELLSEARCH that received the Prix Galien in 2009 for the Best Medical Technology (the Prix Galien is the Nobel Prize of commercial biotech & pharma).

As Dr. Liberti and his son contemplated starting a new business, they were struck by the story of a little girl in Happy Valley who was making worldwide headlines. As she was dying of leukemia, Emma Whitehead’s doctors at the Children’s Hospital of Philadelphia tried a last-ditch experimental treatment: They used a disabled form of the virus that causes AIDS to reprogram Emma’s immune system genetically to kill cancer cells. After the treatment, she was declared cancer-free. She was the first child and one of the first humans ever in whom new techniques have achieved a long-sought goal — giving a patient’s own immune system the lasting ability to fight cancer.

Ted Liberti says, “As we learned about Emma’s CAR-T cell treatment with University of Pennsylvania’s Drs. June, Levine, Grupp, Porter, et al., we knew cell & gene therapy was the next place for us to go.”

With their business goal in mind, the next step was funding. In Dr. Liberti’s first company, venture capitalists were involved in the startup, but this time they wanted to eschew VC investment, and Ted Liberti says that Penn State’s Happy Valley ecosystem was the perfect place for that to happen.

“Our company really fits Happy Valley,” he says. “We had the choice to use venture capitalists, but we decided, no, let’s keep it here. Let’s fund it from corporate partnerships and involvement from Centre County. So we did.” 

Early funding came from two major Pharma companies and NIH’s National, Heart, Lung & Blood Institute (NHLBI) via a peer-reviewed Phase I SBIR grant for $280,000.

Ted says, “To succeed, we knew we’d need to partner well, fast and effectively and with the right companies. In September 2012, we kicked off BMS with a non-dilutive contract from one of the world’s Top 5 pharma companies to make our ferrofluids better, more magnetic and more exquisitely accurate. We were once again determined to be bold, dream big and above all meet our technology milestones to open future funding and partnering goals. From BMS’ start, we started solving big problems in the field of cell and protein separations and bioprocessing and ‘wrote patent applications at every turn to build value and lay the groundwork for future strategic partnerships.’”

“It’s such a great sense of pride, knowing this will change human healthcare history. To give companies the tools to make such eloquent changes in cells. Knowing that we can make such an impact … this part is so much fun. Partnering with KKR’s Gamma Bioscience to get there … It’s a storybook thing. We couldn’t have found a better partner in Gamma Bio to help us get our cell selection technology to market. I am so very proud to have been part of Paul’s team to make this a reality these last amazing nine years.”

He says that if they had started BioMagnetic in one of biotech’s meccas like Cellicon Valley in Philadelphia or in Boston, the startup costs would have been easily more than three times as much.

 “Of course, there can be a downside to being in Happy Valley. I am not sitting in Philadelphia, nor a quick drive from Princeton, NYC or Maryland’s NIH, the D.C. hot spot. I have to constantly ask myself, ‘Am I networking as aggressively as I would be if I was in Boston, NYC, Princeton, San Francisco or LA?’ It’s possible to do, but you just have to be very intentional about it. Of course, the benefits of staying here have been immense. We have such bright, bright people and the mother ship of Penn State has been very good for us.” He adds that it’s often tough to keep top young Penn State graduates who are drawn to jobs in major metropolitan areas like Boston, Philly, or PhD and master’s programs outside of Happy Valley.

Next step: Cellicon Valley

With BioMagnetic Solutions’ acquisition by KKR’s Gamma Biosciences, BMS will continue to operate independently, but with all the immense benefits of being part of the world’s most prestigious global private equity company. As BMS’ X-GRAFFE is introduced into labs around the world, BMS’ team is well positioned to see immense progress from their research, hard work and inventions.

Ted will also change from BMS’ COO to CBO. “According to Wikipedia, that doesn’t mean I’m a knight,” he said with a laugh, referring to the British title ‘CBE,’ used to indicate a commander in the order of the British Empire. As chief business officer, he’ll help drive deal making and strategy, building shareholder value and marketing and sales. He says the company plans to expand its manufacturing operations to the Cellicon Valley region in Philadelphia within the next year to join other leaders in cell and gene therapy research and development.

Honoring Dr. Liberti’s life and vision with this new chapter

Just days after the pivotal acquisition was made, Dr. Paul Liberti, Ted’s father, mentor and BioMagnetic’s visionary inventor, died suddenly. The loss of his presence and ‘cathedral of ideas’ is keenly felt. “I like to say that he was like his inventions. He was so magnetic and so, so very creative,” Ted says. “As soon as he invented something, he’d start dreaming up ways it could be even better. He was such a force of life, a true scientific and engineering genius.” Yet, “he was so very humble, so very grounded, never seeking the limelight for his amazing discoveries and contributions to human health.”

Ted looks forward to honoring his father’s life work through this new chapter with Gamma Bioscience. “I am so very proud to have been part of Paul’s team to make this a reality these last amazing nine years,” he says.

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