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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In the complicated U.S. healthcare system, navigating a serious illness such as cancer or heart disease can be remarkably challenging for patients and caregivers. When that illness is classified as a rare disease, those challenges can become even more acute. And when that rare disease occurs in a population that experiences health disparities, such as people with sickle cell disease (SCD) who are primarily Black and Latino, challenges can become almost insurmountable.

David Meek, new Mirati CEO (Marlene Awaad/Bloomberg via Getty Images)

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Some companies are listening, according to a recent BIO survey which showed that this year’s companies were 2.5 times more likely to have a diversity and inclusion program compared to last year’s sample. But we still have a long way to go. Women represent just 31% of biotech executives, BIO reported. And those numbers are even more stark for women of color.

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Vicente Anido (University of West Virginia via YouTube)

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