F-star CEO: Revamped Merck KGaA Pact Is First Step In New Corp Direction
Executive Summary
F-star CEO tells Scrip reconfiguring biotech’s pact with Merck KGaA on oncology asset FS118 is UK group’s first big move towards a wholly owned portfolio strategy.
A revision to F-star’s agreement with Merck KGaA has propelled the UK-based bispecific antibody specialist on a new course to develop a proprietary pipeline, its CEO said.
The 2017 immuno-oncology R&D collaboration with Merck KGaA granted the German group exclusive development and commercial rights to five novel bispecific antibodies, including FS118, a first-in-class antagonist inducing dual blockade of PD-L1 and LAG-3 mediated immunosuppressive pathways. But now, the big pharma has handed back FS118, saying it was not sufficiently differentiated, and the firms have rejigged the rest of the deal.
Under the terms of the new agreement, F-star retains exclusive rights to develop and commercialize FS118, a clinical-stage tetravalent bispecific antibody. At the same time, Merck has exercised its option for one discovery stage program and retains the right to option a second discovery program from the 2017 original agreement. No financial terms of the agreement are being disclosed.
"By striking this deal with Merck KGaA we now have both hands on the reins of FS118 and that should allow us to speed up its development,” Eliot Forster, F-Star’s CEO told Scrip.
Until now, F-star, which was formed in 2006, has been generating its revenues by leveraging its modular antibody technology and mAb² programs through partnerships with biopharmaceutical companies, notably Merck KGaA, AbbVie Inc. and Denali Therapeutics Inc.
That will continue as the biotech develops its nascent pipeline, starting with FS118.
Pipeline Plans
FS118 is a potential first-in-class tetravalent bispecific antibody for the treatment of cancer, developed to overcome tumor evasion mechanisms promoted by two molecules, LAG-3 (lymphocyte-activation gene 3) and PD-L1 (programmed death-ligand 1), and has the potential to restore the natural ability of the immune system to fight cancer, Forster said.
FS118 has shown potent T-cell activation as well as superior tumor control in preclinical studies and entered Phase I clinical testing in April 2018 in PD-1/PD-L1 therapy refractory patients, which is expected to read out during 2020.
"We’re very excited to see the FS118 data emerge in the early part of next year from two perspectives,” Forster said. “We are especially keen to see if we can have a biomarker-led, disease agnostic stratification of patients with this therapy, and we’re already seeing encouraging data, but we’ll get to see much more of that over the next none to 12 months,” he added.
“We’re looking across patient groups and believe we’ll be able to identify those who are most susceptible to benefit from FS118 using our biomarker. The biomarker is an unusual feature of a tetravalent, bispecific antibody and we believe we have the potential for a stratified approach during the course of next year.
“That should allow us to use a ‘bottom-up’ approach, so we will look at patients before they start treatment to make sure that they have the susceptible biomarker profile to therapy,” said Forster, who appointed CEO of F-star in October 2018 following the retirement of John Haurum; he had held the position for the previous six and a half years.
As part of F-star’s aim to grow a proprietary program it is putting two other potential first-in-class bispecific compounds with novel mechanisms of action into the clinic, they being FS120 and FS222.
FS120 is a dual agonist monoclonal antibody targeting OX40 and CD137 checkpoints. FS222 is a combination of a checkpoint agonist and a checkpoint inhibitor modulator that simultaneously targets the CD137 receptor on the T cell and PD-L1 on the tumor cell.
Moving those compounds into the clinic this year is part of F-star’s new corporate approach.
“At the end of last year F-star decided to have a wholly owned portfolio of medicines and the reconfiguration of our collaboration with Merck KGaA is the most significant deal towards that, bringing in one clinical stage asset in the form of FS118 and plans for two further assets, FS120 and FS222, into the clinic during the course of this year,” Forster said.
Merck KGaA’s View
Merck's pharma head Belén Garijo confirmed on a 14 May conference call for the German group's first quarter financials that the collaboration with F-star would continue as "there are some exciting early discovery activities related to other innovative co-stimulatory bispecific antibodies that we look forward to better understanding together."
She added that the German firm decided not to opt in to FS118 mainly because of "the prospect of that clinical development not really meeting our standards for clinical differentiation on the basis of the pharmacokinetic data that we saw coming from the first study in patients."
Merck, which has a bispecific antibody in its pipeline – M7824 – being developed in a multimillion euro pact with GSK, noted that two charges were booked associated with F-Star – a €27m impairment on its earnings per share and a €45m writedown of the option value to acquire the UK group. (Also see "Merck KGaA Keen To Remain Key Player In MS Now And In Future" - Scrip, 14 May, 2019.)
Partnering Prospects
Forster said that F-star would consider partnering FS118 around the Phase II stage if the identified biomarker was in colorectal cancer of non small-cell lung cancer.
“That’s simply because in those settings the high competition and level of patients required to demonstrate benefit would argue for partnering around the Phase II area,” the CEO said.
“However, if we see an orphan indication, with a few handfuls of patients we could provide proof of concept and then with a few tens of patients get through to a regulatory approval then I believe we’d be beyond that before we start thinking about partnering, waiting in that instance until the orphan commercializing step,” Forster added.
He said the company is adequately funded in the short-term but needs to decide how to generate the necessary funds to grow its wholly-owned pipeline.
“We have cash in hand for the remainder of this year and are now thinking about how we’ll finance the strategy going forward and we’re looking at our options," he said, adding, "We are continuing our partnerships and will thus continue to receive income from those.”
He said a possible stock market listing would be one of the options to consider but that no decision had yet been made.