An­ti­fun­gal out, can­cer in: Rev­o­lu­tion scores $500M Sanofi deal on first on­col­o­gy pro­gram

Less than a year ago, Third Rock start­up Rev­o­lu­tion Med­i­cines shed its an­ti­fun­gal am­bi­tions and re­made it­self as an on­col­o­gy com­pa­ny. Now, the Red­wood City-based biotech has ap­par­ent­ly wooed Sanofi $SNY in­to a bang up deal on its first can­cer pro­gram.

Mark Gold­smith

The com­pa­ny said Wednes­day that Sanofi will be pick­ing up the check for its lead pro­gram’s R&D, while of­fer­ing a $50 mil­lion up­front pay­ment and up to $500 mil­lion in gat­ed mile­stones. The two com­pa­nies are al­so shar­ing US prof­its (and loss­es) in a 50/50 split — an un­usu­al­ly bal­anced deal for an ear­ly-stage biotech like Rev­o­lu­tion to fi­na­gle.

What’s Rev­o­lu­tion got? Its lead pro­gram is a pre­clin­i­cal-stage small mol­e­cule that might fight can­cer in two sep­a­rate ways. The drug in­hibits SHP2, a cel­lu­lar en­zyme in the pro­tein ty­ro­sine phos­phatase fam­i­ly that plays a key role in sev­er­al types of can­cer. Rev­o­lu­tion’s pres­i­dent and CEO Mark Gold­smith tells me the drug, coined RMC-4630, can both “sup­press cell growth sig­nal­ing and over­come sup­pres­sive ac­tiv­i­ties in the im­mune sys­tem” in cer­tain can­cers. In oth­er words, it has the po­ten­tial to stall — or even shrink — the tu­mor it­self, and al­so neu­tral­ize the im­mune-sup­press­ing en­vi­ron­ment in which the tu­mor thrives.

The lead drug will move in­to hu­man tri­als dur­ing the sec­ond half of this year, Gold­smith says, test­ing the com­pound against non-small cell lung can­cer (NSCLC). When asked if NSCLC was get­ting crowd­ed, Gold­smith em­phat­i­cal­ly de­fend­ed the con­tin­u­ing need for new ther­a­pies in the field.

“There seems to be an emerg­ing view that non-small cell lung can­cer has been tak­en care of with the use of chemo plus check­point in­hibitors, but I be­lieve that’s a vast­ly over­stat­ed pos­ture and a lit­tle re­gret­table,” Gold­smith said. “Lung can­cer re­mains a se­ri­ous scourge in the US with a high fa­tal­i­ty rate and on­ly a sub­set of pa­tients ben­e­fit from the cur­rent tar­get­ed ther­a­pies, chemo, or check­point in­hibitors. Even those pa­tients who do re­ceive tar­get­ed ther­a­py of­ten — and quick­ly — de­vel­op re­sis­tance to the tar­get­ed ther­a­pies.”

But it’s not just NSCLC Rev­o­lu­tion is tak­ing on. The com­pa­ny thinks its tech can al­so tack­le colon can­cer and some melanomas. The Sanofi deal gets the phar­ma gi­ant ex­clu­sive world­wide rights to com­mer­cial­ize any ap­proved prod­ucts tar­get­ing SHP2, al­though there’s a US-on­ly co-pro­mote op­tion writ­ten in for Rev­o­lu­tion.

Rev­o­lu­tion was court­ing suit­ors for months af­ter it no­ti­fied sev­er­al big phar­mas that it was look­ing for part­ners last year. They got to term sheets with a few, but ul­ti­mate­ly were smit­ten with what Sanofi could bring to the ta­ble. Sanofi is a com­mer­cial­iza­tion pow­er­house, they were ex­cit­ed about the sci­ence and will­ing to let it re­main in Rev­o­lu­tion’s hands un­til lat­er stages of de­vel­op­ment. Plus, they were cov­er­ing the costs of R&D (free­ing up Rev­o­lu­tion to ex­pand dis­cov­ery-stage projects), and per­haps most im­por­tant­ly — Sanofi agreed that they would split US prof­its and loss­es 50/50.

“The foun­da­tion­al fea­ture of this busi­ness deal is that 50/50 prof­it and loss share arrange­ment in the US,” Gold­smith said. “This is re­al­ly im­por­tant to us. When cre­at­ing suc­cess­ful biotech com­pa­nies, you can­not aban­don re­al com­mer­cial op­por­tu­ni­ty — in the US es­pe­cial­ly. And frankly, we de­cid­ed if we couldn’t find a part­ner that would share US prof­its then we wouldn’t sign a part­ner at all.”

Luck­i­ly, Sanofi was amenable. Now, Gold­smith said, the com­pa­ny has the re­sources to fo­cus on build­ing its pipeline. With a re­cent $56 mil­lion fundrais­ing round just four months ago — plus this new $50 mil­lion up­front pay­ment — the com­pa­ny is well cap­i­tal­ized to go about dis­cov­er­ing. Rev­o­lu­tion has some on­go­ing projects in mTORC1 and SHP1 that will be the fo­cus mov­ing for­ward.

Brian Kaspar. AveXis via Twitter

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Novartis CEO Vas Narasimhan [via Bloomberg/Getty]

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Levi Garraway. Broad Institute via Youtube

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Ritu Baral Cowen
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