Loxo beefs up its genetics-based cancer drug pipeline with an unusual $40M deal

After building on its rep as a genetically-focused cancer drug company at ASCO with the latest update on larotrectinib (LOXO-101), Loxo Oncology is now beefing up its pipeline in search of another drug that can be used for a carefully defined patient group.

The Stamford, CT-based biotech has carved out a Bruton’s tyrosine kinase (BTK) inhibitor program from Redx Pharma for $40 million. Unusually, it’s a straight cash deal for Loxo and Redx — no milestones or royalties apply here. That is rare to see for a preclinical drug that isn’t expected to begin human testing until next year.

Now LOXO-305, this new drug is designed to reversibly bind to BTK and keep working in the face of C481S acquired resistance mutation. And that’s how Loxo plans to remain genetically focused for a very narrow patient population.

Josh Bilenker, CEO Loxo

“It is our belief that the widespread use of covalent BTK inhibitors, such as ibrutinib, will increasingly drive acquired resistance through a mutational event in BTK called C481S, leading to a group of relapsing patients in need of new therapies,”  said Jacob Van Naarden, chief business officer of Loxo Oncology. “Our work suggests that a highly selective, reversible BTK inhibitor can address this emerging unmet need in patients whose disease has progressed on a covalent BTK inhibitor.  The development of a highly selective compound in a genetically-defined population is a Loxo Oncology core competency.”

Redx, meanwhile has had some financial woes that made a cash deal more attractive than a long-term pact packed with biobucks. The UK biotech has had trouble paying back a £2 million loan from public officials in Liverpool.

While the vast majority of cancer drugs are developed for a specific part of the body — breast, liver, lung, etcetera — the FDA has been eager to think outside of the usual anatomical boxes. Now genetically defined cancers like this represent a major new market opportunity, as the FDA highlighted with last May’s approval of Keytruda for specific genetic traits.

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