Bristol Myers takes next big gamble on I/O frontier, pledging nearly $1.4B on Texas firm's tumor toxins
Bristol Myers Squibb has made several deals in immuno-oncology recently, looking for potential follow-ups to its blockbuster drug Opdivo. And on Thursday, they made their latest play into the space, backing a small Texas biotech with a couple of big-name backers.
BMS has agreed to a “multi-target” oncology collaboration with Austin-based Molecular Templates, the companies announced Thursday morning. The deal pays the biotech $70 million upfront with up to $1.3 billion available in milestone payments, in addition to royalties on future sales. BMS has already selected the first target.
The companies are not, however, disclosing how many targets BMS can option into, Molecular Templates CFO Adam Cutler told Endpoints News in an email. But Cutler said the agreement does not involve any of the biotech’s existing programs, and there is no overlap between Thursday’s deal and its previous collaborations with Takeda and Vertex.
News of the agreement appeared to delight investors, with Molecular Templates $MTEM shares spiking about 12% in early Thursday trading.
Molecular Templates has been working on a platform called engineered toxin bodies, or ETBs, which use genetically engineered versions of the Shiga-like Toxin A subunit to try to treat cancer. They go after cancer cells and also add antigens into the cancer cells themselves, helping prime the immune system to target them for destruction.
Their lead program, MT-3724, is currently in an ongoing Phase II study in the most common form of non-Hodgkin lymphoma. It’s targeting CD20 as a monotherapy in the relapsed/refractory setting, and in separate combinations with chemo and the former Celgene blockbuster Revlimid in earlier lines of treatment.
The candidate, which is the company’s “first-generation” ETB, has spurred some safety worries among investors, according to Stifel’s Stephen Willey. But the breadth of Thursday’s deal provides some comfort that the programs further down the pipeline won’t have as many concerns.
“We hate to use the term ‘validation’ when speaking to (business development) activity,” Willey wrote to investors, “but we believe this deal reads well for the second-generation platform technology.”
That would include Molecular Templates’ other two programs currently in Phase I studies. First there’s MT-5111, which the company says specifically binds and kills HER2 expressing cells, which is being evaluated in multiple solid tumors. Then there’s a Takeda-partnered program in TAK-169 that goes after cells expressing CD38, which is being studied in multiple myeloma.
Back in September 2018, Takeda forked over $30 million upfront for the partnership and promised milestones that could add up to $632.5 million. Molecular Templates is planning on providing “strategic clarity” on MT-3724 in the first half of 2021, Willey wrote, with dose-escalation data expected for MT-5111 in the same timeframe.
For BMS, Thursday’s deal is another in a long line of I/O plays. The pharma spent $475 million upfront to partner with Dragonfly on an IL-12 program, and snapped up the biotech Forbius in a deal centered around a TGF-beta program. Both moves occurred last August.