When Bristol-Myers Squibb agreed to pay up to a jaw-dropping $1.25 billion to acquire the fledgling biotech Flexus back in early 2015 for the sole purpose of gaining control of a preclinical IDO1 drug, the math seemed to defy every known standard on overnight biotech windfalls.
The 18-month-old biotech had just lined up a $38 million round from Kleiner Perkins, Celgene and The Column Group. In a world where a 10X payoff after a few years is considered a home run, Bristol-Myers’ $800 million upfront, with $450 million in early-stage milestones, for a drug that had yet to go into humans was done on a whole new level.
“We had a data set that suggested it has the potential to be best-in-class, with the ability for a partner to combine it with many other assets,” Flexus co-founder Terry Rosen told me at the time. “If you look at any company working in oncology, it can potentially increase the value of a whole portfolio of assets. It could be multiplicative and that creates a big valuation.”
What went largely (though not entirely) unnoticed at the time was that a furious Incyte — the widely recognized leader in IDO1 now in late-stage testing with one of the most closely-watched programs in oncology — quickly went to war over the deal.
The company claimed that Jordan Fridman, a scientist in its ranks, had systematically lifted its IDO1 secrets before making his way to Flexus. In a lawsuit filed against Rosen and Juan Jaen seeking more than a billion dollars in damages, Incyte claimed that Fridman had been demanding information on their IDO1 work in the three months he remained at Incyte after giving notice.
Later in 2014, according to a lawsuit Incyte filed against Flexus, Fridman “falsely told Incyte’s employees that Flexus did not have an IDO-1 inhibitor project and that he was no longer working on IDO-1 inhibitors.” But then he allegedly admitted his involvement later that year.
The News Journal in Delaware covered the case in a big feature today, which is likely to refocus considerable attention on Bristol-Myers’ IDO1 work on BMS-986205, which is now being studied in combination with its big checkpoint inhibitor Opdivo. According to the report, the case is headed to court next year.
Lawyers for Rosen and Jaen denied the claims and seem ready to fight it out in front of a judge.
In an abstract posted at AACR last April, Bristol-Myers — which like its rivals is partnered with Incyte’s IDO1 epacadostat — boasted about the clear potential they were seeing in their early-stage in-house program. According to their abstract:
Evidence of substantial serum kyn reduction was observed at doses as low as 25 mg QD; inhibition at 100 and 200 mg QD appears greater than that reported for other in-class compounds. In addition, we have presented the first evidence of intratumoral kyn reduction by an IDO1 inhibitor. These data suggest the potential of BMS-986205 as an IDO1 inhibitor with superior PD properties and support further evaluation in combination with nivo.
EvercoreISI’s Umer Raffat just days ago put out a note saying that he thinks the Bristol-Myers drug could be better than Incyte’s — with one crucial difference. He wrote: “(R)ather than simply prevent the enzyme’s substrate from binding, BMY’s inhibitor wrecks the whole structure of the active site, forming the basis for a potentially irreversible inhibitor.”
The Bristol-Myers drug is now in three different studies, according to the listings on clinicaltrials.gov, including a Phase II rapid-fire set of combination tests for non-small cell lung cancer. And Phase I/II data is due at the upcoming SITC conference in early November.
Fridman, who’s not a named party in the lawsuit, went on to join another Kleiner Perkins startup called FLX Bio as the CSO. A spokesperson for the company, though, says he’s left the biotech.
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