Austin-based Molecular Templates scored three times on Wednesday.
Early in the day the biotech announced a deal with Takeda to take their 2-year preclinical odyssey up to the proverbial next level, angling to take an engineered toxin tech into the clinic. Takeda’s Boston R&D group — about to undergo a monumental transformation with the Shire takeover — inked the pact, handing over $30 million in cash and promising a rich tapestry of milestones that totaled in the hundreds of millions of dollars.
That news in turn spawned a big run of the little biotech’s stock $MTEM, which zoomed up 52% by the end of the market day. And then Molecular Templates — following a familiar game plan on Wall Street — immediately looked to cash in with a raise, which took some of the steam out of its newly swollen share price.
Takeda hasn’t been quick to talk numbers up to now, but was evidently in a generous mood as the partners declared themselves highly satisfied with the work they’ve done identifying drug candidates that target CD38.
One of the most popular targets in multiple myeloma, the partners have been working together to create engineered toxin bodies, bacteria designed to target myeloma cells festooned with CD38 on the surface. And the companies like to spotlight that they’re traveling a separate path from the popular approach that relies heavily on the immune system to drive a therapeutic effect.
The Texas company already has had early-stage clinical work underway for their lead drug, MT-3724, now being tested in patients with B cell non-Hodgkin’s lymphoma and B-cell CLL. The company has collaborated with MD Anderson in Houston and also raised cash from the state’s CPRIT group, set up to support Texas-based biotechs concentrating on oncology.
They’ll share development costs for now and Takeda is confident enough to offer a motherlode of back-end milestones that add up to $632.5 million. If Molecular Templates doesn’t pick up a co-development option on the table that sinks to $337.5 million tops.
The endorsement is free.
“Throughout our research collaboration with Molecular Templates, we have seen the promise of its ETB platform for the discovery and development of new therapies,” says Philip Rowlands, head of the Oncology Therapeutic Area Unit at Takeda. “As we expand our relationship and continue to explore next-generation modalities, our hope is to bring forth new and important treatment options for patients.”
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