Cel­gene signs Jounce as its new biotech star in $2.6B ‘im­muno-on­col­o­gy 2.0’ pact

Over the past year Cel­gene has com­mit­ted $1.25 bil­lion in cash – plus bil­lions more in mile­stones – to a pair of ma­jor im­muno-on­col­o­gy deals with Juno and Agios. To­day, Cel­gene has cho­sen its new star part­ner for can­cer R&D, step­ping up with a rich­ly front-end­ed $2.56 bil­lion deal to col­lab­o­rate with up­start Jounce Ther­a­peu­tics’ on its lead I/O pro­gram, plus a pack­age of treat­ments in dis­cov­ery.

It’s a clas­sic Cel­gene deal, swing­ing for the fences for a po­ten­tial block­buster or two while ag­gres­sive­ly woo­ing up-and-com­ing de­vel­op­ers with an open check­book and an open mind about leav­ing lead re­search ef­forts on the drugs to their new dance part­ner. More such deals are on the way, as top ex­ecs at Cel­gene pave the way to new pacts de­signed to take them well past the first wave of check­point in­hibitors, as well as the T cell treat­ments now in late-stage de­vel­op­ment, to com­mand a lead­ing role for it­self in the field.

Cel­gene is pay­ing $225 mil­lion in the up­front, adding $36 mil­lion in eq­ui­ty and com­mit­ting up to $2.3 bil­lion in mile­stones to com­plete the deal. In turn the big biotech gets dibs on a 40% share of U.S. prof­its for Jounce’s lead drug, the pre­clin­i­cal JTX-2011, plus a 75% share for its un­named suc­ces­sor and a split on three more pro­grams. There’s al­so an opt-in avail­able on an ex­per­i­men­tal check­point pro­gram tak­ing shape at Jounce.

Once Cel­gene choos­es to opt in, the two com­pa­nies will divvy up ex­pens­es the same way they plan to share prof­its. And Cel­gene gets all ex-U.S. rev­enue with a roy­al­ty stream for Jounce.

Rob Her­sh­berg, CSO of Cel­gene

“We love deals like this,” Cel­gene CSO Rob Her­sh­berg tells me. “ICOS is the most ad­vanced in the (Jounce) pipeline, dri­ving the eco­nom­ics, but it is way be­yond a T-cell deal. Agios is a per­fect ex­am­ple, push­ing the en­ve­lope be­yond the con­ven­tion­al check­point sto­ry.”

Her­sh­berg sees Agios as the best in can­cer meta­bol­ics. And now he’s been deeply im­pressed by the team at Jounce – im­muno-on­col­o­gy rock star Jim Al­li­son is a sci­en­tif­ic co-founder – and its abil­i­ties to iden­ti­fy bio­mark­ers while clear­ly defin­ing pa­tient sub­groups most like­ly to ben­e­fit.

“The qual­i­ty of the sci­ence and the peo­ple is re­al­ly good,” says the CSO.

Cel­gene has a col­lab­o­ra­tion in place with As­traZeneca’s PD-L1 dur­val­um­ab, adds Her­sh­berg. But when the check­points can re­li­ably help about 25% of pa­tients as a sin­gle agent, Cel­gene has a big fo­cus on that oth­er 75% of the mar­ket.

Adds Her­sh­berg: “We don’t want to com­pete with 500 oth­er tri­als in com­bi­na­tion with a check­point.”

Rich Mur­ray, CEO Jounce Ther­a­peu­tics

“This is re­al­ly go­ing to al­low us to ex­pand the way we need to,” says Jounce CEO Rich Mur­ray. Cur­rent­ly op­er­at­ing with a staff of 60, Mur­ray ex­pects to add 20 more em­ploy­ees lat­er in the year, with the lead drug go­ing to its first, four-part adap­tive study that starts with safe­ty and PK and leads to the ef­fi­ca­cy stage in the sec­ond half of next year.

That lines up with a pop­u­lar strat­e­gy on can­cer drug de­vel­op­ment, where the tra­di­tion­al break­down in tri­als has now blend­ed in­to a rel­a­tive­ly fast shot at piv­otal re­sults.  The lead pro­gram will be test­ed as a sin­gle agent and in com­bo with a PD-1 check­point in­hibitor. And Jounce plans to push its own check­point pro­gram in­to the clin­ic as a “log­i­cal com­po­nent” of a larg­er on­col­o­gy ef­fort like this.

The plat­form com­pa­ny was launched by Third Rock, ring­ing up $103 mil­lion in two ven­ture rounds from in­vestors deeply im­pressed by its mar­quee sci­en­tif­ic co-founders, Al­li­son and Pam Shar­ma.

The lead drug says a lot about Jounce. It’s fo­cused on ICOS, AKA the In­ducible T cell CO-Stim­u­la­tor, a pro­tein on the sur­face of T cells Jounce — and now Cel­gene — be­lieves can spur an im­mune re­sponse against a pa­tient’s can­cer.  Im­muno-on­col­o­gy has been at the cross­roads of a mul­ti­tude of deals over the past three years, and Cel­gene clear­ly wants to be in the front end of the sec­ond wave — what Mur­ray calls im­muno-on­col­o­gy 2.0 — af­ter Bris­tol-My­ers and Mer­ck led the way with Op­di­vo and Keytru­da for check­point in­hi­bi­tion.

Cel­gene has a big fo­cus on on­col­o­gy, with fran­chis­es for Revlim­id and Abrax­ane fund­ing a large pipeline ef­fort that in­cludes pacts for Juno’s JCAR015 and JCAR017. Af­ter that comes im­munol­o­gy and in­flam­ma­tion.

Mur­ray says Jounce start­ed off 2016 with a va­ri­ety of op­tions on the ta­ble, pri­mar­i­ly re­volv­ing around an IPO or a ma­jor pact. The mar­ket hasn’t co­op­er­at­ed, yet, on the IPO, and af­ter try­ing out var­i­ous “fla­vors” of po­ten­tial deals, Jounce opt­ed for a big scoop of Cel­gene.

Biotech Half­time Re­port: Af­ter a bumpy year, is biotech ready to re­bound?

The biotech sector has come down firmly from the highs of February as negative sentiment takes hold. The sector had a major boost of optimism from the success of the COVID-19 vaccines, making investors keenly aware of the potential of biopharma R&D engines. But from early this year, clinical trial, regulatory and access setbacks have reminded investors of the sector’s inherent risks.

RBC Capital Markets recently surveyed investors to take the temperature of the market, a mix of specialists/generalists and long-only/ long-short investment strategies. Heading into the second half of the year, investors mostly see the sector as undervalued (49%), a large change from the first half of the year when only 20% rated it as undervalued. Around 41% of investors now believe that biotech will underperform the S&P500 in the second half of 2021. Despite that view, 54% plan to maintain their position in the market and 41% still plan to increase their holdings.

Bio­gen hit by ALS set­back with PhI­II fail­ure for tofersen — but fol­lows a fa­mil­iar strat­e­gy high­light­ing the pos­i­tive

Patients and analysts waiting to hear Sunday how Biogen’s SOD1-ALS drug tofersen fared in Phase III didn’t have to wait long for the top-line result they were all waiting for. The drug failed the primary endpoint on significantly improving the functional and neurologic decline of patients over 28 weeks as well as the extension period for continued observation.

In fact, there was very little difference in response.

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UP­DAT­ED: Boehringer nabs FDA's first in­ter­change­abil­i­ty des­ig­na­tion for its Hu­mi­ra com­peti­tor — but will it mat­ter?

The FDA late Friday awarded Boehringer Ingelheim the first interchangeability designation for its Humira biosimilar Cyltezo, meaning that when it launches in July 2023, pharmacists will be able to automatically substitute the Boehringer’s version for AbbVie’s mega-blockbuster without a doctor’s input.

The designation will likely give Boehringer, which first won approval for Cyltezo in 2017, the leg up on a crowded field of Humira competitors.

Reshma Kewalramani, Vertex CEO (YouTube)

Ver­tex gets much-need­ed win with ‘ex­tra­or­di­nary’ first pa­tient re­sults on po­ten­tial di­a­betes cure

Vertex said Monday that the first patient dosed with its cell therapy for type 1 diabetes saw their need for insulin injections vanish almost entirely, a key early step in the decades-long effort to develop a curative treatment for the chronic disease.

The patient, who had suffered five potentially life-threatening hypoglycemic — or low blood sugar — episodes in the year before the therapy, was injected with synthetic insulin-producing cells. After 90 days, the patient’s new cells produced insulin steadily and ramped up their insulin production after a meal like normal cells do, as measured by a standard biomarker for insulin production.

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No­var­tis de­vel­op­ment chief John Tsai: 'We go deep in the new plat­form­s'

During our recent European Biopharma Summit, I talked with Novartis development chief John Tsai about his experiences over the 3-plus years he’s been at the pharma giant. You can read the transcript below or listen to the exchange in the link above.

John Carroll: I followed your career for quite some time. You’ve had more than 20 years in big pharma R&D and you’ve obviously seen quite a lot. I really was curious about what it was like for you three and a half years ago when you took over as R&D chief at Novartis. Obviously a big move, a lot of changes. You went to work for the former R&D chief of Novartis, Vas Narasimhan, who had his own track record there. So what was the biggest adjustment when you went into this position?

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Susan Galbraith, Executive VP, Oncology R&D, AstraZeneca

As­traZeneca on­col­o­gy R&D chief Su­san Gal­braith: 'Y­ou're go­ing to need or­thog­o­nal com­bi­na­tion­s'

 

Earlier in the week we broadcast our 4th annual European Biopharma Summit with a great lineup of top execs. One of the one-on-one conversations I set up was with Susan Galbraith, the oncology research chief at AstraZeneca. In a wide-ranging discussion, Galbraith reviewed the cancer drug pipeline and key trends influencing development work at the pharma giant. You can watch the video, above, or stick with the script below. — JC

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Two drug­mak­ers hit with PDU­FA date de­lays from FDA amid back­log of in­spec­tions

As the FDA is weighed down with more and more pandemic responsibilities, the agency is beginning to miss PDUFA dates with more frequency too. Two different companies on Monday said they received notices that the FDA has not completed their drug reviews on time.

The review of an NDA for Avadel Pharmaceuticals’ candidate treatment for narcolepsy is not coming this month, the company said, and the review of UCB’s BLA for bimekizumab, used to treat moderate to severe plaque psoriasis, will miss its target date as well.

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Terrie Curran, Phathom CEO (Credit: Arcutis)

Phath­om's old Take­da drug bests Pre­vacid in a PhI­II GI tri­al. Next stop? The FDA

There’s no time for rest in biopharma — at least not at Phathom Pharmaceuticals. Just over a month after submitting two NDAs for its lead acid-fighter vonoprazan, the biotech is already lining up a third, and collecting an extra $50 million to push things along.

Vonoprazan met its primary non-inferiority endpoints in a Phase III study comparing it to standard-of-care Prevacid in a type of gastroesophageal reflux disease (GERD) called erosive esophagitis (EE). It also proved superior to the popular heartburn drug by multiple measures, including healing rate and maintenance of healing.

Thomas Lingelbach, Valneva CEO

Small biotech says its Covid-19 vac­cine spurs more an­ti­bod­ies than As­traZeneca’s. Will sup­ply deals come now?

In a first, a small runner-up vaccine developer says its own Covid-19 jab has induced “superior neutralizing antibody titer levels” over AstraZeneca’s AZD1222 when pitted head-to-head in a Phase III trial.

That and non-inferiority in seroconversion rate were the co-primary endpoints of the trial, which recruited 4,012 adult volunteers across the UK.

But on the exploratory endpoint of Covid-19 case counts, Valneva notes that both treatment groups saw a similar number of infections.