Looking for an I/O edge, Bristol-Myers fronts $105M to partner with Halozyme as Roche expands pact

After racking up H1 sales of $2.3 billion for its PD-1 star Opdivo, Bristol-Myers Squibb is now fronting $105 million — with a trove of $1.8 billion-plus in milestones — to see whether its hugely important immuno-oncology franchise can be helped by the delivery tech developed at Halozyme.

That’s not all for Halozyme. Right after the Bristol-Myers $BMY deal popped Thursday morning, Roche {RHHBY} unveiled its own plan to use the delivery tech for another target of its own — expanding on their collaboration — which it will keep under wraps. That adds a $30 million up-front payment with another $160 million in milestones, bringing the package today to $2 billion in the up fronts and goal cash for Halozyme $HALO.

Halozyme shares surged 18% as the deals lined up this morning.

The San Diego-based biotech will lend its hyaluronidase enzyme (rHuPH20) — which temporarily degrades hyaluronan — to see if Bristol’s drugs can be delivered with a subcutaneous jab instead of by IV. That would be a key preference for doctors and patients, and in the intensely competitive I/O field — where Bristol-Myers has stumbled — any competitive advantage is being hotly pursued.

Helen Torley, Halozyme

This new tech from Halozyme has the potential to create “flexible and convenient treatment delivery options,” notes Bristol-Myers commercial chief Murdo Gordon.

PD-1 is at the top of the list of 11 targets in the deal, of course, with “multiple” additional programs in the deal. And the pact includes plenty of options for more in the first 5 years, with each target worth a potential $160 million in milestones. And there’s more money on the table for combo therapies — the hot focus now that the pioneers are out front and claiming market share.

There’s more to these deals than a competitive edge over rivals, Halozyme CEO Helen Torley told me today, though that is clearly in play with the Bristol-Myers deal. A subcutaneous injection is faster, easier and also less expensive for payers, who won’t overlook the money that can be deducted from providing these expensive therapies.

These deals mark a watershed moment for Halozyme, she adds, as a recent FDA approval for rituximab and hyaluronidase human is an easy injection has helped inspire a lineup of potential partners to knock on their doors to discuss new pacts.

The deal also marks a big plus for  Torley, who’s had to deal with stumbles of her own. The biotech’s delivery tech inspired its lead drug PEGPH20, which failed a futility test last spring after it was combined with Folfirinox and tested against Folfirinox alone in metastatic pancreatic cancer. Shares of Halozyme dropped 10% last fall after the company announced that AbbVie opted to drop one of their partnered programs using their platform tech with a tumor necrosis factor alpha target. Their Phase I study fell short of its targets, forcing the end of the program. But they’ll continue to work together under the terms of their $153 million 2015 pact.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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