Deal Watch: Xencor Adds New Bispecific Partner In Agreement With Genentech

Genentech will pay $120m up front to co-develop Xencor’s preclinical IL-15 candidate; deal also includes IL-15 R&D. Taiho licenses lung cancer candidate to Cullinan; Celgene and Triphase partner again.

Scrip regularly covers business development and deal-making in the biopharmaceutical industry. Deal Watch is supported by deal intelligence from Strategic Transactions.

Xencor Gets $120m Up Front From Genentech In IL-15 Collaboration

Just weeks after Novartis AG returned all rights to one of its bispecific antibody candidates to Xencor Inc., the antibody developer has found yet another deep-pocketed partner. Xencor will get $120m up front from Genentech Inc. in a development collaboration and R&D tie-up that includes potential for significant earn-outs.

Genentech gets global development and commercial rights to preclinical interleukin-15 (IL-15) cytokine therapeutic XmAb24306. The companies will co-develop that candidate and potentially other IL-15 targeted antibodies, with Genentech covering 55% of the development costs and taking 55% of the profits under the collaboration. The partners also will undertake a two-year R&D effort to discover new IL-15-targeted therapies.

Xencor has existing partnerships with Novartis and Amgen Inc.. Novartis returned all rights to Phase I bispecific antibody XmAb13676 on Jan. 7 – citing a strategic pipeline reorganization – but the two companies remain partnered on another Phase I candidate – XmAb14045 for acute myeloid leukemia under their 2016 agreement. (Also see "Deal Watch: Sanofi Retains Options To Two Bispecifics While Exiting Antibody Pact With Regeneron" - Scrip, 7 Jan, 2019.) Xencor inked a collaboration for its antibodies in inflammation and cancer with Amgen in 2015. [See Deal]

Xencor says IL-15 is a highly active immune signaling protein that has presented clinical development challenges previously. XmAb24306 combines the IL-15 receptor alpha in a bispecific antibody with the cytokine to stimulate expansion and activation of natural killer (NK) cells and cytotoxic T cells, the company says, but with reduced regulatory T-cell activation compared to IL-2-targeted therapies.

Xencor says its candidate can provide a more druggable version of IL-15 that may offer better tolerability, slower receptor-mediated clearance and a prolonged half-life compared to previous attempts to harness IL-15 in a therapeutic. It should be amenable to combination with a wide range of agents, which the collaboration will explore broadly, the company adds.

The agreement stipulates that Genentech will commercialize any drugs reaching market from the collaboration, although Xencor will have an option to co-promote in the US. The biotech can earn up to $160m in development milestone fees for XmAb24306 and up to $180m in milestone fees per candidate for other antibodies emerging from the IL-15 R&D work.

Taiho Licenses Ex-Japan Rights For EGFR Inhibitor To Cullinan

Taiho Pharmaceutical Co. Ltd. and Cullinan Oncology LLC unveiled an agreement Feb. 5 under which the latter will get worldwide rights, except for Japan, to TAS6417, an oral tyrosine kinase inhibitor that may offer a new therapeutic option to lung cancer patients with a specific genetic mutation. The Japanese firm gets an undisclosed upfront fee and can earn regulatory and sales milestone fees plus royalties on net sales under the deal.

The pact establishes a new subsidiary of Cullinan called Cullinan Pearl to develop TAS6417. Taiho’s corporate venture arm will be a Series A investor in the subsidiary under the agreement. Cullinan Pearl will pursue development of the compound using its parent’s shared service platform, which includes central management and a network of collaboration partners who undertake the preclinical and clinical development activities. Cullinan is backed by MPM Capital and F2 Ventures with a portfolio-management approach to novel cancer therapies. (Also see "Cullinan To Search For Oncology’s Diamonds In The Rough" - Scrip, 3 Oct, 2017.)

Taiho used its proprietary drug discovery technology to create TAS6417, which targets epidermal growth factor receptor (EGFR) Exon 20 insertion mutations. It is engineered to inhibit such EGFR variants while not disturbing wild-type EGFR, the companies say. It will be developed for non-small cell lung cancer patients whose disease is driven by Exon 20 insertion mutations.

Celgene, Triphase Ink New Collaboration For Leukemia Therapy

Building on a successful relationship that began in 2012, Triphase Accelerator Corp. and Celgene Corp. have entered a new deal surrounding the development of Triphase’s leukemia candidate TRPH395. Celgene paid $40m up front for an option to acquire TRPH395, a WDR5 inhibitor in preclinical studies for acute myeloid leukemia. If it exercises the option, Celgene could pay up to $940m in development, regulatory and sales milestone fees, plus royalties.

In 2012, Celgene gained right of first refusal on the first three candidates to be developed by Triphase, including Phase I/II proteasome inhibitor marizomib for multiple myeloma and glioblastoma, which Celgene licensed exclusively in 2016. [See Deal] From that deal, the partners are also working on Triphase’s CD22 antibody-drug conjugate TRPH222 for non-Hodgkin lymphoma, according to the company’s pipeline.

Announcement of the new deal Jan. 29 came as Celgene is in the process of being acquired by Bristol-Myers Squibb Co. (which is paying a whopping $74bn). The acquisition has not slowed Celgene’s deal-making endeavors: since the M&A was announced, it signed deals with Obsidian Therapeutics Inc. for cell therapies, and it paid $80m up front and committed significant royalties to new immuno-oncology partner Kyn Therapeutics. (Also see "Deal Watch: Celgene Makes Alliances With Kyn, Obsidian After Bristol Buyout" - Scrip, 21 Jan, 2019.)

Alexion Gets Option To Acquire Caelum Under Co-development Pact

Alexion Pharmaceuticals Inc. and Caelum Biosciences Inc. agreed Jan. 31 to collaborate on the development of Caelum's CAEL101 (mAb 11-1F4) for amyloid light chain (AL) amyloidosis, a rare systemic disorder that causes the buildup of misfolded immunoglobulin light chain protein in tissues.

CAEL101, a chimeric fibril-reactive monoclonal antibody, is designed to improve organ function by reducing or eliminating amyloid deposits, which, if untreated, may result in progressive damage to the organs, particularly the heart and kidneys. Currently in Phase I, CAEL101 was originally licensed to Caelum in 2017 from Columbia University, which previously received FDA orphan drug status for the antibody as both a radio-imaging agent in amyloidosis and as a potential therapy in the AL amyloidosis indication. [See Deal]

Alexion will pay $30m up front for a 19.9% equity interest in Caelum and $30m in milestone-dependent development funding (includes $5m upon equivalence of the clinical supply of CAEL101; $10m upon first patient dosing in a Phase II trial; and $15m upon the enrollment of 50% of patients in a Phase II clinical trial). The partners will jointly design the ongoing development program for CAEL101, with Caelum responsible for manufacturing and conducting development through the end of Phase II, at which point Alexion has the exclusive option to acquire the rest of the company for $150m-$200m, depending on BLA approval timing for CAEL101.

Should it exercise the purchase option, Alexion could additionally pay out up to $325m in regulatory- and commercialization-based payments related to CAEL101, including $50m-$75m upon US FDA approval of a biologic license application (BLA); $25m for sales (within a calendar year) exceeding $250m; $50m for sales exceeding $500m; $75m for sales exceeding $750m; and $100m for sales exceeding $1bn.

Fortress Biotech Inc. founded Caelum in January 2017 and held a majority stake, but following Alexion’s current equity investment, Fortress’ ownership is now reduced to approximately 40%. (Also see "Fortress Biotech: A Drug Financing Experiment Expands" - In Vivo, 13 Jun, 2017.) Fortress is eligible to receive about 43% of the proceeds if Alexion exercises the option.

Neuraxpharm Expands Geographically With Farmax Buyout

German/Polish specialty pharma neuraxpharm Arzneimittel GMBH plans to expand its commercial operations further into central and eastern Europe (CEE) through the acquisition of Czech Republic-based Farmax. No financial terms were disclosed around the deal announced Feb. 1.

Both companies focus on central nervous system therapies, with Farmax offering an established distribution presence in the Czech Republic, Slovakia and Hungary. With the sale, Farmax will be renamed Neuraxpharm Bohemia.

Neuraxpharm was created in 2016 by a combination with four other firms – Spain’s Qualigen Inc., Laboratorios Lesvi and Inke, and Italy’s FB Health SPA. (Also see "Nupharm rebrands itself to Neuraxpharm" - Generics Bulletin, 19 Oct, 2018.) At first called NuPharm, the consolidated company rebranded itself as Neuraxpharm last October. In a statement, Neuraxpharm CEO Jorg Thomas Dierks said increasing business in the CEE region is a pillar of the company’s expansion strategy.

Aldeyra Acquires Helio Vision

Aldeyra Therapeutics Inc. is acquiring ophthalmic-focused biotech Helio Vision Inc. for $10m up front in common stock (1.15m shares) and another $2.5m in stock two years from the date of closing. Helio shareholders could also earn another $12.5m in stock for regulatory-based earn-outs.

The earn-outs under the Jan. 29 agreement are as follows: $10m upon FDA approval of a new drug application (NDA) for a proliferative vitreoretinopathy (PVR) treatment prior to the 10th anniversary of the closing date, and $2.5m following NDA approval of a non-PVR indication prior to the 12th anniversary of the closing date. Aldeyra’s lead ophthalmic program is reproxalap, which is in Phase III for dry eye disease, Sjogren-Larsson syndrome, non-infectious anterior uveitis and allergic conjunctivitis. (Also see "In Dry Eye, A Variety Of Mechanisms Pursue Established Therapies" - Scrip, 15 Jan, 2018.)

Founded in 2016, Helio Vision’s sole product candidate is Phase III-ready ADX2191, an intravitreal methotrexate formulation for treating PVR. There are no approved therapies for the scarring condition that develops as a complication of rhegmatogenous retinal detachment.

ADX2191 was discovered by researchers at Harvard Medical School and the Massachusetts Eye & Ear Infirmary. It has orphan drug status from the FDA. Helio Vision co-founders will work with Aldeyra on the compound as consultants.

Halozyme Pens Enhanze License With Argenx

Halozyme Therapeutics Inc. has granted argenx SE exclusive access to its Enhanze drug-delivery technology to develop multiple subcutaneous formulations for current or future argenx candidates. Argenx will use Enhanze for compounds targeting the human neonatal Fc receptor FcRn, including its lead program efgartigimod (ARGX113) plus up to two additional targets. (Also see "Future Looks Bright For Ambitious Argenx " - Scrip, 23 Aug, 2018.)

For the access agreed to Feb. 4, argenx will pay Halozyme $30m up front, $10m per future target, up to $160m in development, regulatory and sales milestone fees per selected target, plus mid-single-digit sales royalties. Efgartigimod is in Phase II for myasthenia gravis and idiopathic thrombocytopenic purpura.

Enhanze uses a recombinant human hyaluronidase enzyme to temporarily degrade hyaluronan and help disperse injectable drugs more evenly into the body. The technology improves upon delivery and absorption of subcutaneously delivered therapies, and can help shorten drug administration time.

Including this deal, Halozyme has nine collaborations for its Enhanze platform, the last partner being Alexion in late 2017. [See Deal]

ScPharma, West Team Up In Drug Delivery

scPharmaceuticals Inc. and West Pharmaceutical Services Inc. announced Jan. 29 that they are teaming up to incorporate West’s SmartDose drug-delivery system with scPharma’s lead candidate Furoscix for treating edema in patients with heart failure. Recently completed preliminary feasibility studies that assessed drug stability in the pre-filled cartridge, drug compatibility and overall performance showed that the SmartDose system could successfully deliver Furoscix.

SmartDose is a wearable patch injector that enables hands-free drug delivery. Last October, scPharma announced that the FDA asked that it conduct additional human factors studies and a dose-delivery validation study with Furoscix. The company plans to complete those studies required to re-file Furoscix by the end of 2019. ScPharma seeks to expedite the advancement of a next-generation on-body delivery system with a pre-filled cartridge and anticipates filing the NDA in 2020.

Ono Gets Rights To Repare's DNA Polymerase Theta Program

Repare Therapeutics Inc. granted Ono Pharmaceutical Co. Ltd. exclusive rights Jan. 31 to develop and sell Repare’s small molecule DNA polymerase theta inhibitor program in Japan, South Korea, Taiwan, Hong Kong, Macau and ASEAN countries, excluding mainland China. Ono will pay $15m in upfront and research service fees plus cost-sharing through filing of an investigational new drug (IND) application. After the IND, Ono is responsible for up to $160m in development, regulatory and commercialization milestones, plus royalties ranging from the high-single to low-double digits.

DNA polymerase theta is a multifunctional DNA polymerase needed to repair DNA breaks in homologous recombinant deficient (HRD) cells. HRD tumors are commonly treated with PARP inhibitors, but many patients either do not respond or show resistance to such therapies. Polymerase theta inhibitors are being investigated as effective treatments for this population.

GC LabCell To Apply AbClon's HER2-Targeting Antibody In CAR-NK Cell Therapy

GC LabCell agreed Jan. 30 to license worldwide rights to AbClon Inc.’s HER2 target antibody technology to apply to natural killer cells for the development of next-generation CAR-NK cell therapies in a deal worth KRW3bn ($2.7m).

AbClon's HER2-targeting antibody technology is said to increase therapeutic effect of CAR-NK cells. GC LabCell expects the next-generation therapy to be effective in cancer cells that don’t respond to existing anti-cancer targeted therapies.

GC LabCell plans to converge CAR-NK technology, using its NK cell mass production and freeze formulation technology, with the HER2-targeting antibody technology to proceed with non-clinical trials in gastric cancer. The latest license agreement follows a co-research agreement reached by the two last year to develop CAR-NK cell therapy.

GC LabCell is a cell-therapy specialist focusing on NK cells and stem cell therapeutics. It is a subsidiary of GC Holdings Corp., which also has GC Pharma, formerly known as Green Cross Corp., under its wing.

Stay tuned for the next issue of Deal Watch. You can read more about other deals that have been covered in depth by Scrip in recent days below:

(Also see "GSK Makes I-O Move With Merck KGaA Deal Worth Up To €3.7bn" - Scrip, 5 Feb, 2019.)	Already working with Pfizer Inc. on the immunotherapy Bavencio, Merck KGAA has bagged another big pharma player in GlaxoSmithKline PLC to progress what has been heralded by analysts as the German group's oncology game changer, M7824, which combines two powerful and synergistic anticancer mechanisms into one molecule.
(Also see "Simbec-Orion MBO Underpins Build And Buy Strategy" - Scrip, 5 Feb, 2019.)	Private equity group CBPE Capital acquires majority stake in UK CRO and will finance expansion into US; deal provides Welsh Life Sciences Investment Fund with first exit.
(Also see "Medicxi Links With Sosei Heptares For Orexin Agonist Vehicles " - Scrip, 5 Feb, 2019.)	After spending 12 months looking for promising orexin agonist candidates, asset-centric venture capitalist Medicxi finds answer close to home and commits up to €40M to create two companies underpinned by assets from Heptares Therapeutics Ltd.
(Also see "Bristol Approached Celgene Nearly Two Years Ago, Got A Better Deal Later" - Scrip, 1 Feb, 2019.)	Documents detailing negotiations over the proposed Bristol/Celgene merger show Bristol’s offer decreased over time, but Celgene may still come out ahead. An effort to find another bidder failed, however.
(Also see "MeiraGTx Signs J&J To Develop Gene Therapies For Rare Retinal Diseases" - Scrip, 31 Jan, 2019.)	While it wants to keep other programs for diseases with larger patient populations in house, MeiraGTx Holdings PLC believes Johnson & Johnson offers the global reach to expedite its program in inherited retinal diseases, including three clinical candidates.
(Also see "Voyager Nabs Neurocrine As Partner In CNS Gene Therapy" - Scrip, 29 Jan, 2019.)	Voyager Therapeutics Inc. signals Phase II study of gene therapy VY-AADC in Parkinson's disease is on track, with no expectations for regulatory setbacks.