Incyte $INCY has just inked a $900 million deal to grab global rights to an early-stage PD-1 checkpoint now being developed at MacroGenics.
The two companies announced Wednesday morning that Incyte will pay $150 million in a cash upfront for the development and commercialization rights to MGA012, with MacroGenics hanging on to rights for running combination studies using their pipeline cancer drug assets.
The deal includes $420 million in development milestones along with $330 million for commercial goals. Royalties will stretch from 15% to 24%.
Investors liked it, driving up MacroGenics’ shares $MGNX by 18% in the mid-afternoon.
The PD-1 therapy is currently in Phase I being tested as a monotherapy in four different tumor types. And the first data cut from the dose escalation study is due to go public in a couple of weeks at the SITC meeting in Washington, DC.
“We do see the uniqueness of the deal in commercializing the combination products,” says MacroGenics CEO Scott Koenig. This way the PD-1 can be a “backbone” therapy at both companies, the two execs add, going into a broad set of combination trials with researchers at Incyte and MacroGenics pursuing their individual objectives — without getting in each other’s way.
Incyte is widely viewed as the leader in the IDO1 field now, with pivotal data coming up for epacadostat. Already partnered with Merck and Bristol-Myers Squibb in combination trials using their checkpoints, Incyte clearly sees value in having their own PD-1 to use for combos.
The deal comes two years after Incyte grabbed a pact with China’s Jiangsu Hengrui Medicine for an anti-PD-1 drug dubbed SHR-1210. In exchange for $25 million upfront and a heavily back ended $770 million package of milestones — including a $150 million bonus if the treatment can prove its superiority — Incyte CEO Herve Hoppenot got all global rights outside of China and related territories.
That drug, Hoppenot tells me today, was linked to a unique and mild side effect — grade 1 and 2 hemangiomas, small, non-cancerous vascular skin growths — that made it unappealing for combination work in a highly competitive field, forcing the switch to MacroGenics as a new partner.
Koenig adds that MacroGenics is scaling up new manufacturing capability that they will use to supply the PD-1, offering another commercial advantage for the biotech.
“Anti-PD-1 therapy is becoming a mainstay of cancer treatment across multiple tumor types, and we believe the addition of MGA012 to our clinical pipeline is important to fulfilling our long-term development strategy in immuno-oncology. This collaboration with MacroGenics will allow us to rapidly explore the potential clinical benefit of developing MGA012 as a monotherapy and also combining anti-PD-1 therapy with several of our existing portfolio assets,” said Steven Stein, chief medical officer of Incyte.
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