Deals, Immuno-oncology

AstraZeneca is paying Innate Pharma at least $242M in near-term cash to sew up rights to monalizumab-plus

Just 2 days after rolling out a positive snapshot of activity for its NKG2A immune checkpoint inhibitor monalizumab at ESMO, Innate Pharma SA (Euronext: $IPH) has struck a rich add-on collaboration deal with AstraZeneca, which is bulking up its I/O pipeline in a deal that includes $170 million in upfront payments, a $72 million equity deal plus billions in added milestone payments covering a range of development programs.

With $242 million in cash on the table this year and next, and another $100 million in near-term cash on the table for pivoting into a late-stage study, AstraZeneca is making an unusually big payout relative to its track BD record over the last few years, clearly indicating that it sees a big future for these Innate therapies. And they’re getting $50 million back by out-licensing US and EU rights to a newly approved drug in the portfolio, allowing Innate to begin commercialization work in the US.

Shares of Innate rocketed up 29% on the news.

Let’s break it down.

The jewel in this crown is monalizumab, which promises to restore an immune response by NK and T cells, half of the heart of the I/O approach, where AstraZeneca sees a big future for Imfinzi, its PD-L1 checkpoint that allows a more effective assault by immune cells, taking the brakes off the system.

Pascal Soriot

AstraZeneca is paying $100 million in upfront cash for the oncology rights to the therapy, with $100 million due at the start of Phase III with $825 million due on a full slate of milestones. AstraZeneca will pay 70% of the late-stage development cost with Innate covering a capped 30% figure. Innate has an option on co-promotion rights in Europe.

Why monalizumab? In Munich investigators unveiled early data on a combination of monalizumab and cetuximab for squamous cell carcinoma of the head and neck.

The data, says the company, reflected:

(T)he overall response rate was 27.5% (by RECIST) including 1 confirmed complete response (2.5%) and 10 partial responses (25%). Disease control rate at 24 weeks (DCR) was 35%. Median progression-free survival (PFS) and overall survival (OS) reached 5.0 and 10.3 months, respectively. In addition, there were 3 (18%) responders among the 17 patients who had been previously treated with PD-1/L1 antibodies.

Then there’s IPH5201, CD39.

AstraZeneca is paying $50 million for an option on the rights to the drug, with $835 million in milestone money. If AstraZeneca takes the option up, they will cover the Phase III unless Innate steps in on 50% of the cost in exchange for co-promotion rights in Europe.

AstraZeneca is paying $20 million on options for 4 additional preclinical programs, with $355 million in milestones on each. Then there’s $72 million going into the acquisition of 9.8% of Innate’s equity.

Innate, meanwhile, agreed to pay $50 million for Lumoxiti, the newly approved drug for rare cases of third-line hairy cell leukemia that AstraZeneca has planned to sell for $150,000 covering 6 treatment cycles.

That all amounts to an unusual big-money deal for AstraZeneca, which has been selling assets recently to help cover costs as Pascal Soriot bets big on new cancer drugs like Lynparza and Tagrisso and Imfinzi to turn things around at the pharma giant. With those drugs accelerating on the market, he’s now adding a drug with human data to start backing up its promise.

Soriot said that the deal allows his company to “further strengthen our leadership in immuno-oncology, and to explore the potential of next generation immuno-oncology pathways, together with the world-class scientific team of Innate.”

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Sr. Manager, Regulatory Affairs, CMC
CytomX Therapeutics San Francisco, CA
Marketing Associate - Demand Generation
Catalytic Data Science Charleston, SC
Associate Principal, Life Sciences Partnerships
Flatiron Health New York City or San Francisco

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