Mer­ck’s can­cer R&D jug­ger­naut ties up to lit­tle Drag­on­fly’s nat­ur­al born killer plat­form — with bil­lions on the line

A lit­tle more than a year af­ter Cel­gene bel­lied up to the part­ner­ship ta­ble with $33 mil­lion in cash to al­ly it­self with the up­start crew at Drag­on­fly, Mer­ck has now fol­lowed be­hind in search of what they’re hop­ing is a game-chang­ing ap­proach to treat­ing sol­id tu­mors.

“There’s no com­pa­ny that knows sol­id tu­mors more than Mer­ck,” says Drag­on­fly CEO Bill Haney, who re­cent­ly jumped in­to biotech with a pair of new com­pa­nies look­ing to make their mark in dif­fer­ent fields.

Mer­ck nev­er likes to talk num­bers and some of the par­tic­u­lars are in short sup­ply. But this isn’t a small-dol­lar deal. 

“It’s sig­nif­i­cant­ly more at­trac­tive eco­nom­i­cal­ly,” says Haney, com­pared to Cel­gene.

Tyler Jacks

Cel­gene paid $8.3 mil­lion up­front per pro­gram, Haney tells me, and Mer­ck was in­spired to go deep­er than that for a mul­ti-pro­gram ef­fort. Add it all up, and Mer­ck has agreed to pay up to $695 mil­lion per pro­gram, all in, in­clud­ing mile­stones.

The deal marks an­oth­er big step up for Drag­on­fly, which has a ster­ling rep built around its high-pro­file sci­en­tif­ic founders.

There’s Tyler Jacks, an MIT pro­fes­sor, HH­MI in­ves­ti­ga­tor and di­rec­tor of the David H. Koch In­sti­tute for In­te­gra­tive Can­cer Re­search. Berke­ley’s David Raulet, whose back­ground as an ex­pert in NK cells and tu­mor im­munol­o­gy helped spot­light some of the big ideas Drag­on­fly is pur­su­ing, clear­ly played a big role with this deal. Haney, an en­tre­pre­neur and film­mak­er (work­ing on a doc­u­men­tary about No­bel prize win­ner Jim Al­li­son) with close con­tacts to the Cam­bridge/Boston biotech hub, is at the helm. 

The com­pa­ny’s plat­form cen­ters on TriN­KETs (Tri-spe­cif­ic, NK cell En­gager Ther­a­pies), a bind­ing mech­a­nism that links nat­ur­al killer cells to the pro­teins found on the sur­face of can­cer cells. And that kind of ap­proach, they be­lieve, can cre­ate a po­tent next-gen im­munother­a­py ap­proach — po­ten­tial­ly a big deal for a com­pa­ny like Mer­ck. NK cells have be­come a pop­u­lar tar­get in can­cer R&D over the last few years as I/O has swelled in im­por­tance.

David Raulet

Haney is mov­ing fast af­ter de­but­ing this biotech a lit­tle more than a year ago. The CEO tells me that Drag­on­fly is hard at it, grow­ing its staff from 15 to 35 with more em­ploy­ees to be re­cruit­ed soon. The group is work­ing on its own pipeline, with plans to be in the clin­ic next year. And there’s al­so a clear po­ten­tial for ad­di­tion­al mar­quee part­ners to be added — at the right time.

The first or­der of busi­ness now is to do a good job for the part­ners they have, says Haney, adding that they have walked away from oth­er deals. 

“In the next 6 months we’ll an­nounce ad­di­tion­al tar­gets with ad­di­tion­al part­ners,” he says.

Mer­ck, mean­while, con­tin­ues to ex­e­cute on its plans to build a port­fo­lio around the PD-1 star Keytru­da, which has been a game chang­er in can­cer treat­ment. The hun­dreds of check­point stud­ies it’s ei­ther han­dling it­self or work­ing on with oth­ers has helped shed a light on sol­id tu­mors, and Mer­ck’s Roger Perl­mut­ter is well known for his in­ter­est in new tech — so long as it fits his bud­get in R&D.


Im­age: Bill Haney. DRAG­ON­FLY

Has the mo­ment fi­nal­ly ar­rived for val­ue-based health­care?

RBC Capital Markets’ Healthcare Technology Analyst, Sean Dodge, spotlights a new breed of tech-enabled providers who are rapidly transforming the way clinicians deliver healthcare, and explores the key question: can this accelerating revolution overturn the US healthcare system?

Key points

Tech-enabled healthcare providers are poised to help the US transition to value, not volume, as the basis for reward.
The move to value-based care has policy momentum, but is risky and complex for clinicians.
Outsourced tech specialists are emerging to provide the required expertise, while healthcare and tech are also converging through M&A.
Value-based care remains in its early stages, but the transition is accelerating and represents a huge addressable market.

Alaa Halawaa, executive director at Mubadala’s US venture group

The ven­ture crew at Mubadala are up­ping their biotech cre­ation game, tak­ing care­ful aim at a new fron­tier in drug de­vel­op­ment

It started with a cup of coffee and a slow burning desire to go early and long in the biotech creation business.

Wrapping up a 15-year discovery stint at Genentech back in the summer of 2021, Rami Hannoush was treated to a caffeine-fueled review of the latest work UCSF’s Jim Wells had been doing on protein degradation — one of the hottest fields in drug development.

“Jim and I have known each other for the past 15 years through Genentech collaborations. We met over coffee, and he was telling me about this concept of the company that he was thinking of,” says Hannoush. “And I got immediately intrigued by it because I knew that this could open up a big space in terms of adding a new modality in drug discovery that is desperately needed in pharma.”

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Rohan Palekar, 89bio CEO

89bio’s PhII da­ta add to quick suc­ces­sion of NASH read­outs as field seeks turn­around

89bio said its drug was better than placebo at lessening fibrosis without worsening nonalcoholic steatohepatitis, or NASH, in two of three dose groups.

The San Francisco biotech said it thinks the Phase IIb data pave the way for a potential Phase III, following in the footsteps of another biotech in its drug class, Akero Therapeutics. To fund a late-stage study, CEO Rohan Palekar told Endpoints News 89bio “would need to raise additional capital,” with the company having about $188 million at the end of last year.

FDA in­di­cates will­ing­ness to ap­prove Bio­gen ALS drug de­spite failed PhI­II study

Ahead of Wednesday’s advisory committee hearing to discuss Biogen’s ALS drug tofersen, the FDA appeared open to approving the drug, newly released briefing documents show.

Citing the need for flexibility in a devastating disease like ALS, regulators signaled a willingness to consider greenlighting tofersen based on its effect on a certain protein associated with ALS despite a failed pivotal trial. The documents come after regulatory flexibility was part of the same rationale the agency expressed when approving an ALS drug last September from Amylyx Pharmaceuticals, indicating the FDA’s openness to approving new treatments for the disease.

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Roche and Lil­ly team up to de­vel­op blood test to de­tect ear­ly signs of Alzheimer's

Eli Lilly is teaming up with Roche to help develop a blood test to detect early signs of Alzheimer’s disease and determine whether a patient should go for further confirmatory testing.

Roche’s Elecsys Amyloid Plasma Panel (EAPP) measures pTau 181 protein assay and APOE E4 assay in human blood plasma – elevations in pTau 181 are present in the early stages of Alzheimer’s, while the presence of APO E4 is the most common genetic risk factor for the disease.

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Flare Therapeutics biochemists Yong Li (L) and Valerie Vivat

A $123M Flare will get Third Rock on­col­o­gy biotech in­to the clin­ic this year

Flare Therapeutics will start its first human trial this year with an investigational urothelial cancer drug after pulling together a $123 million Series B from Big Pharmas, VCs and its incubator, Third Rock Ventures.

Launched in 2021 on the idea that a biotech could finally succeed at drugging the much-sought-after but stubborn transcription factor, Flare Therapeutics said Wednesday it is now primed for the clinic after closing its large financing haul earlier this year. The raise is a relatively stark figure in a tough startup financing environment but further buoys the upbeat signals coming out of other Third Rock biotechs in recent weeks, including the $200 million CARGO Therapeutics and $100 million Rapport Therapeutics rounds.

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Francesco Marincola, newly-appointed Sonata Therapeutics CSO

Kite's head of re­search leaves for Flag­ship start­up Sonata

Another leader is departing Kite Pharma, and will to spend the “last part” of his career exploring how cancer evades the immune system.

Kite’s senior VP and global head of cell therapy research Francesco Marincola left the Gilead CAR-T unit last week for Sonata Therapeutics. Flagship last May unveiled the startup, which was pieced together from two fledgling biotechs Inzen and Cygnal Therapeutics. As CSO, Marincola will lead Sonata’s push to reprogram cancer cells to make them more immunogenic.

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NIH re­jects an­oth­er at­tempt to 'march-in' on Astel­las' prostate can­cer drug over ex­ces­sive price

The National Institutes of Health has again declined to use so-called “march-in” rights to lower the price of Astellas and Pfizer’s prostate cancer drug Xtandi despite being invented at UCLA with grants from the US Army and NIH.

“Given the remaining patent life and the lengthy administrative process involved for a march-in proceeding, NIH does not believe that use of the march-in authority would be an effective means of lowering the price of the drug,” NIH told prostate cancer patients Robert Sachs and Clare Love, in a letter shared with Endpoints News. The institutes’ analyses found Xtandi “to be widely available to the public,” an indication that there was not a pressing need for the US to act.

No­vo Nordisk re­mains un­der UK scruti­ny as MHRA con­ducts its own re­view in 'in­cred­i­bly rare' case

The UK’s Medicines and Healthcare products Regulatory Agency is now reviewing Novo Nordisk’s marketing violation that resulted in its loss of UK trade group membership last week. Novo Nordisk was suspended on Thursday from the Association of the British Pharmaceutical Industry (ABPI) for two years after an investigation by its regulatory arm found the pharma broke its conduct rules.

MHRA said on Tuesday that its review of the Prescription Medicines Code of Practice Authority (PMCPA) investigation is standard practice. An MHRA spokesperson emphasized in an email to Endpoints News that the situation with Novo Nordisk is “incredibly rare” while also noting ABPI took “swift and proportionate action.”

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