Struggling Oncolytics Biotech signs $86.6M Asia deal with China's Adlai Nortye
Calgary, Canada-based Oncolytics Biotech has struck an $86.6 million licensing deal with China’s Adlai Nortye for its IV immuno-oncolytic virus. Paying $5.3 million upfront with the prospect of another $16 million in short-term cash available, Adlai gained development and commercialization rights to Reolysin (pelareorep) in China, Hong Kong, Macau, Singapore, South Korea and Taiwan.
The Hangzhou-based biopharma agreed to two potentially quick payouts, with $8 million for equity and then another $7.9 million if Oncolytics can hit its marks on certain regulatory advancements. Upon achievement of the full slate of clinical, regulatory and commercialization milestones, Oncolytics can receive up to an additional $65.4 million.
Oncolytics $ONCYF could use the cash. Its share price soured badly over the past few years on mixed data for its lead drug, with the stock falling into penny stock territory — which forced a shift to the OTC market. The founding CEO left a year ago and in its most recent quarterly report Oncolytics reported that it had $14 million in cash on hand. Co-founder Matt Coffey is now in charge.
More recently researchers have been upbeat about Reolysin data, but the struggling is far from over.
Licensing deals for the China market have proliferated in the past couple years. While some big pharma companies are starting to pull out or lower expectations, other biopharmas are piling in, looking to China’s enormous market in hopes of expanding their sales.
That said, this particular deal appears to be a first for both companies. Reolysin, an engineered virus designed to trigger innate and adaptive immune responses, will be Adlai’s first late-stage drug (with six others in the pipeline, some licensed from within China).
“Given its potential in multiple oncological indications and its ability to be used in combination with multiple chemotherapies and immunotherapies, Reolysin will help to broaden future therapies made available by Adlai Nortye and advance us towards commercialization,” CEO Carsten Lu said in a statement.
For Oncolytics, which places all its hopes in this sole product, this is hopefully just the beginning.
Following an FDA fast track designation in May and a recent meeting with the regulator, Oncolytics has hurried up to find partners in other regions such as Europe or Japan. The plan is to start a 400-patient PhIII study focused on 400 paHR+/HER2- metastatic breast cancer. If the EMA hands down its formal guidance by the end of the year as expected, the company will begin enrolling patients in mid-2018 â€” thanks in part to the money gained in this regional agreement with Adlai.