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Lilly and Foghorn sign oncology deal

Eli Lilly has teamed up with Foghorn Therapeutics to develop drugs that target the chromatin regulatory system using Foghorn's proprietary Gene Traffic Control platform

Eli Lilly

Data suggest that more than 30 different cancers are associated with mutations in brahma-related gene-1 (BRG1), which account for 5% of all tumours and up to 10% of non-small cell lung cancers.

Loxo Oncology, an R&D group within Eli Lilly & Co, is betting that highly selective BRAHMA inhibitors are the key to addressing BRG1 mutated cancers.

The company has announced a strategic collaboration with Foghorn Therapeutics to co-develop and co-commercialise Foghorn's selective biological response modifiers (BRM) oncology programme and an undisclosed oncology target plus three additional discovery programmes using Foghorn's proprietary Gene Traffic Control platform.

Under the terms of the agreement, Foghorn will receive $300m upfront and Lilly will take an $80m equity stake. Foghorn went public last year but has not seen its stock flourish. Lilly’s offer of $20 a share is well above the $12 level it has been trading at prior to the announcement of the deal.

For the first part of the collaboration – the BRM-selective programme and the additional undisclosed target – Foghorn will lead discovery and early research activities, while Lilly will lead development and commercialisation.

Foghorn and Lilly will share 50/50 in the US economics and Foghorn will receive royalties on sales outside the US ‘starting in the low double-digit range and escalating into the twenties based on revenue levels’.

For the three additional discovery programmes, Foghorn – which will lead discovery and early research – could receive up to $1.3bn in milestones plus the ‘option to participate in a percentage of the US economics’. It is also eligible to receive tiered royalties from the mid-single digit to low-double digit range on sales outside the US.

“Oncogenic mutations in BRG1 impact a large population of cancer patients and we believe are best addressed therapeutically with a highly selective BRM inhibitor, though designing such a drug is a difficult chemistry challenge,” said Jacob Van Naarden, Loxo CEO and president of Lilly Oncology. “We've been very impressed by the progress the Foghorn team has made against this product profile and are excited to work with this highly talented team Foghorn has a differentiated platform and we look forward to the prospect of leveraging it to discover multiple new drugs against similarly challenging targets with strong biologic rationale.”

Foghorn's Gene Traffic Control platform is key to the deal. It is a powerful tool for understanding and modulating the chromatin regulatory system, which regulates gene expression by directing the movement of molecules that turn genes on and off.

It is using the technology to pursue multiple treatments for breakdowns in the chromatin regulatory system and ‘is the only company with the ability to study and target the chromatin regulatory system at scale, in context, and in an integrated way’, said Lilly.

Foghorn has multiple product candidates in development in oncology with two currently in clinical studies.

Article by
Hugh Gosling

14th December 2021

From: Research

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