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Jounce bags $225m upfront in Celgene immuno-oncology deal

Five pipeline candidate agreement worth up to $2.5bn should Celgene claim the rights

Celgene has bolstered its immuno-oncology pipeline in an agreement with US biotech Jounce Therapeutics that gives it options on five experimental cancer therapies.

The deal includes an upfront payment of $225m to Massachusetts-based Jounce and could be worth as much as $2.5bn if Celgene exercises its options on all the pipeline candidates. Celgene is also taking a $36m equity stake in the firm.

This is the first licensing deal Jounce has signed and focuses initially on JTX-2011, a drug still in preclinical development that is due to be tested in head and neck and non-small cell lung cancer (NSCLC).

The size of the deal is a remarkable endorsement for Jounce as the company was only formed three years ago, and also ties in with the trend towards 'gold-rush' valuations for immuno-oncology assets. According to Jounce Celgene was one of several companies trying to close a licensing deal.

JTX-2011 targets a pathway in T cells known as ICOS, which is thought to play a key role in T cell activation, and is due to start phase I/II testing in the second half of this year.

Interacting with ICOS has been proposed as a compelling way to enhance the activity of first-generation immuno-oncology drugs such as Bristol-Myers Squibb's already-marketed melanoma drug Yervoy (ipilimumab), a CTLA-4 inhibitor, and PD-1 inhibitors like BMS' Opdivo (nivolumab) and Merck & Co's Keytruda (pembrolizumab).

Meanwhile, Celgene also gains an option to JTX-4014 - another PD-1 inhibitor - and three other undisclosed candidates.

Under the terms of the agreement, if the option on JTX-2011 is exercised Jounce will take the lead on US development and retain a 60% profit share, with a 25% stake in the second programme. The two partners will share rights to any subsequent projects.

Celgene has been building a position in immuno-oncology - what chief executive Mark Alles has called the 'fourth leg' in the cancer therapy table alongside surgery, radiotherapy and chemotherapy - for some time.

The efforts include in-house development projects such as its anti-CD47 antibody CC-90002 (originated by InhibRx), which encourages macrophages to attack malignant cells, as well as partnerships such as its collaboration with AstraZeneca to test Celgene's haematological cancer drugs alongside AZ's developmental PD-L1 inhibitor durvalumab.

Other licensing deals in this area include a four-year immuno-oncology deal with Agios signed in May - with a $200m upfront fee - and earlier agreements with Juno and Bluebird Bio (since dissolved) to develop CAR-T therapies.

Article by
Phil Taylor

20th July 2016

From: Sales



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