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Japanese biotechnology giant Takeda Pharmaceutical Co Ltd (ADR) (TKPYY) recently announced the latest in a string of deals that have seen it take relatively large stakes in the future of tiny, development stage biotechnology companies. Each of these recent announcements included a clause through which Takeda retains the right to acquire the companies in question if it chooses to do so once the initial partnership matures towards completion, and the latest is no different. What is slightly different about this one, however, is what the company is getting for its money. The science on which said tiny biotech entity is working is relatively undeveloped in the space, and this makes it difficult to form an opinion (from a nonscientific investor’s standpoint) as to what value it might bring for Takeda going forward.

With this in mind, and an attempt to clear things up a little, here is a look at the deal, what the science means, and what Takeda is getting for its money.

So, the company that Takeda has just struck its deal with is called GammaDelta Therapeutics.

The deal in question is a collaboration based partnership, which will see the two entities work together on the development of GammaDelta Therapeutics’ novel T cell platform, which is based on the unique properties of what are called gamma delta (??) T cells. It’s these gamma delta cells that will form the base of this discussion.

Before we get into the science, however, let’s outline the terms – Takeda has committed up to $100 million in funding to – and we’re quoting the release here – accelerate the development of investigative assets created using the GammaDelta platform. The funding includes an equity investment, an option fee and research and development funding, and (as we mentioned a little earlier) provides Takeda the exclusive right to purchase GammaDelta Therapeutics if and when the former chooses to exercise its right.

As mentioned, this is the latest in a string of deals within which Takeda has included this (type of) caveat, with recent others including those struck with Maverick, PvP Biologics and Alto.

Anyway, that’s old news. Let’s get to the science.

As mentioned, it’s rooted in gamma delta T cells. Many reading will likely be new to this sort of T cell and that can be forgiven – there’s no treatments or even concept treatments (outside of those which Takeda and GammaDelta are trying to develop) on the market right now that use this type of science.

To understand why, it’s first important to understand a bit about the immune system – or more accurately, immune systems. We’ve got two types – adaptive and innate. The former is the one that learns about new infections (through the harnessing of antigenic recognition) and bases an attack on these previous learnings. It is what vaccinations are based on. The latter, the innate immune system, is rooted in the body’s recognition that something is wrong, and the resulting immediate response to this recognition. It’s far less specific that the adaptive side of the equation, but it plays a just as important role.

So the adaptive side of our immune system is comprised of three things – gamma delta T cells, B cells and alpha beta T cells. The latter two are able to recognize specific foreign antigens, which they do by travelling through the body’s lymphatic system before they can be recruited to sites of infection. Gamma delta T cells, however, identify the presence of pathogens through their effect on the homeostatic environment around them. This is important, and incredibly interesting. They don’t recognize the pathogens themselves, but instead look for signs that a pathogen has infected a cell, or is in the blood stream, or anything like that – some type of sign that things are out of whack.

This ability has huge potential against many diseases, but cancer in particular. Why? Because cancer cells inhibit the adaptive immune system’s ability to recognize them as pathogenic by down resulting expression of the antigens that would give them away. This works for the other two types of cell that make up the adaptive system, but gamma delta cells are far less easily fooled. The latter can recognize that a cancer is present because of its impact on the environment in which it resides, and this makes it practically impossible for cancer cells to hide from them.

So therein lies the potential of gamma delta cells, but all this begs the question, why haven’t these cells been used to date?

The answer is that they exist in too low a concentration to become useful as the core ingredient in a mass market treatment. However, using its proprietary technology platform, GammaDelta has found a way to amplify their existence to a point at which their inclusion as a therapy compound becomes viable.

That’s why this deal is so important for Takeda – if the technology works, and we see the two companies create a viable asset based on this cell type (and further, if Takeda can get it into the clinic) then we’re basically looking at an entirely new treatment type that (because of its option to acquire GammaDelta) Takeda has a monopoly over.

Of course, there’s a chance that the science won’t play ball. The concept to date is based on small scale samples and we’ve seen it before where scale doesn’t translate on amplification.

That’s the risk.

For an investor willing to take on this risk as part of a potentially game changing punt, however, the reward, could easily be justified.