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

ZS Per­spec­tive: 3 Pre­dic­tions on the Fu­ture of Cell & Gene Ther­a­pies

The field of cell and gene therapies (C&GTs) has seen a renaissance, with first generation commercial therapies such as Kymriah, Yescarta, and Luxturna laying the groundwork for an incoming wave of potentially transformative C&GTs that aim to address diverse disease areas. With this renaissance comes several potential opportunities, of which we discuss three predictions below.

Allogenic Natural Killer (NK) Cells have the potential to displace current Cell Therapies in oncology if proven durable.

Despite being early in development, Allogenic NKs are proving to be an attractive new treatment paradigm in oncology. The question of durability of response with allogenic therapies is still an unknown. Fate Therapeutics’ recent phase 1 data for FT516 showed relatively quicker relapses vs already approved autologous CAR-Ts. However, other manufacturers, like Allogene for their allogenic CAR-T therapy ALLO-501A, are exploring novel lymphodepletion approaches to improve persistence of allogenic cells. Nevertheless, allogenic NKs demonstrate a strong value proposition relative to their T cell counterparts due to comparable response rates (so far) combined with the added advantage of a significantly safer AE profile. Specifically, little to no risk of graft versus host disease (GvHD), cytotoxic release syndrome (CRS), and neurotoxicity (NT) have been seen so far with allogenic NK cells (Fig. 1). In addition, being able to harness an allogenic cell source gives way to operational advantages as “off-the-shelf” products provide improved turnaround time (TAT), scalability, and potentially reduced cost. NKs are currently in development for a variety of overlapping hematological indications with chimeric antigen receptor T cells (CAR-Ts) today, and the question remains to what extent they will disrupt the current cell therapy landscape. Click for more details.

Graphic: Kathy Wong for Endpoints News

What kind of biotech start­up wins a $3B syn­di­cate, woos a gallery of mar­quee sci­en­tists and re­cruits GSK's Hal Bar­ron as CEO in a stun­ner? Let Rick Klaus­ner ex­plain

It started with a question about a lifetime’s dream on a walk with tech investor Yuri Milner.

At the beginning of the great pandemic, former NCI chief and inveterate biotech entrepreneur Rick Klausner and the Facebook billionaire would traipse Los Altos Hills in Silicon Valley Saturday mornings and talk about ideas.

Milner’s question on one of those mornings on foot: “What do you want to do?”

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Sec­ondary patents prove to be key in biosim­i­lar block­ing strate­gies, re­searchers find

While the US biosimilars industry has generally been a disappointment since its inception, with FDA approving 33 biosimilars since 2015, just a fraction of those have immediately followed their approvals with launches. And more than a handful of biosimilars for two of the biggest blockbusters of all time — AbbVie’s Humira and Amgen’s Enbrel — remain approved by FDA but still have not launched because of legal settlements.

CBO: Medicare ne­go­ti­a­tions will ham­per drug de­vel­op­ment more than pre­vi­ous­ly thought

As President Biden’s Build Back Better Act — and, with it, potentially the Democrats’ last shot at major drug pricing reforms in the foreseeable future — remains on life support, the Congressional Budget Office isn’t helping their case.

The CBO last week released a new slide deck, outlining an update to its model on how Medicare negotiations might take a bite out of new drugs making it to market. The new model estimates a 10% long-term reduction in the number of new drugs, whereas a previous CBO report from August estimated that 8% fewer new drugs will enter the market over 30 years.

Joshua Brumm, Dyne Therapeutics CEO

FDA or­ders DMD tri­al halt, rais­ing ques­tions about a whole class of promis­ing drugs

Dyne Therapeutics’ stock took a nasty hit this morning after the biotech put out word that the FDA had slapped a clinical hold on their top program for Duchenne muscular dystrophy. And now speculation is bouncing around Biotwitter that there could be a class effect at work here that would implicate other drug developers in the freeze.

Dyne execs didn’t have a whole lot to say about why the FDA sidelined their IND for DYNE-251 in DMD while “requesting additional clinical and non-clinical information for” the drug.

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FDA+ roundup: FDA's neu­ro­science deputy de­parts amid on­go­ing Aduhelm in­ves­ti­ga­tions; Califf on the ropes?

Amid increased scrutiny into the close ties between FDA and Biogen prior to the controversial accelerated approval of Aduhelm, the deputy director of the FDA’s office of neuroscience has called it quits after more than two decades at the agency.

Eric Bastings will now take over as VP of development strategy at Ionis Pharmaceuticals, the company said Wednesday, where he will provide senior clinical and regulatory leadership in support of Ionis’ pipeline.

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Michel Vounatsos, Biogen CEO (Credit: World Economic Forum/Ciaran McCrickard)

An un­ortho­dox pro­pos­al for Bio­gen's Medicare-man­dat­ed Aduhelm tri­al

Biogen has gone full blitz since Medicare announced it would only cover its new Alzheimer’s drug when used in clinical trials, accusing the agency of discriminating against Alzheimer’s patients and trying to get physicians to change regulators’ minds.  Critics, meanwhile, cheered what they see as a necessary wall protecting payers and patients from an unproven and unsafe drug.

Far less attention, though, has gone to what a Medicare-funded clinical trial would actually look like. Biogen has operated as if it would be a standard late-stage Alzheimer’s trial, enrolling a couple thousand patients and giving half placebo.

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Hal Barron (GSK via YouTube)

GSK R&D chief Hal Bar­ron jumps ship to run a $3B biotech start­up, Tony Wood tapped to re­place him

In a stunning switch, GlaxoSmithKline put out word early Wednesday that R&D chief Hal Barron is exiting the company after 4 years — a relatively brief run for the man chosen by CEO Emma Walmsley in late 2017 to turn around the slow-footed pharma giant.

Barron is being replaced by Tony Wood, a close associate of Barron’s who’s taking one of the top jobs in Big Pharma R&D. He’ll be closer to home, though, for GSK. Barron has been running a UK and Philadelphia-based research organization from his perch in San Francisco.

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Chamath Palihapitiya and Pablo Legorreta

Bil­lion­aires Chamath Pal­i­hapi­tiya and Pablo Legor­re­ta hatch an $825M SPAC for cell ther­a­py biotech

Three years after Royalty Pharma chief Pablo Legorreta led a group of investors to buy up a pair of biotechs and create a new startup called ProKidney, the biotech is jumping straight into an $825 million public shell created by SPAC king and tech billionaire Chamath Palihapitiya.

ProKidney was founded 6 years ago but really got going at the beginning of 2019 with the $62 million acquisition of inRegen, which was working on an autologous — from the patient — cell therapy for kidney disease. After extracting kidney cells from patients, researchers expand the cells in the lab and then inject them back into patients, aiming to restore the kidneys of patients suffering from CKD.

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