UPDATED: Xencor says goodbye to its former lead drug, selling all rights to Lonnie Moulder's new startup
More than three years after its lead program failed a Phase II study, Xencor is passing off the drug to an up-and-coming Hong Kong biotech.
Xencor sold exclusive worldwide rights for obexelimab, a bispecific targeting FcγRIIb and CD19 to treat autoimmune diseases, to Lonnie Moulder’s Zenas BioPharma, the companies announced Sunday evening. In exchange, Xencor gets a slice of equity equaling 15% of Zenas’ shares following its next financing round, up to $480 million in milestones and royalties.
In a statement, Xencor CEO Bassil Dahiyat said the deal allows the biotech to focus more on other programs within its “bispecific antibody and cytokine pipeline,” though he did not provide more specifics.
Regardless, Xencor once had high hopes for obexelimab. It was the company’s lead in-house program back in the mid-2010s, with Xencor holding onto rights even while signing multibillion deals with pharma powerhouse Novartis.
Sunday’s news comes a little over a week after another setback in the Novartis deal, as the Swiss pharma handed back most of its rights to another bispecific at the centerpiece of that collaboration, though it remains ongoing.
Xencor had hoped this candidate could prove different from previous autoimmune therapies, touting its ability to target B cell activation without depleting them. Obexelimab, though, missed the primary endpoint in a Phase II lupus study in October 2018, as researchers did not see a statistically significant difference between the placebo and treatment arms in continued improvement after 225 days.
Despite the miss, the biotech has tried to highlight the “positive treatment effect” it saw in the study and, at the time, said it would either launch a Phase III study or find a partner for the program. Xencor is now handing off the drug, however, emphasizing Sunday that Zenas will have “sole responsibility” for all R&D and commercialization activities.
Meanwhile, the program is Zenas’ first to undergo any clinical studies after the company launched earlier this year. Moulder got the biotech started in March with seven preclinical programs, leaping back into biotech after steering MGI Pharma to a $4 billion sale in 2007 to Eisai and Tesaro to a $5 billion buyout with GlaxoSmithKline in 2018.
So far, Zenas has focused largely on autoimmune and rare disease candidates, including a lead drug with China rights in thyroid eye disease. It originally came from ImmunoGen and changed hands multiple times. There are also three other monoclonal antibodies in an older Xencor deal, in which the latter previously received a slice of equity.
Though Moulder helped get Zenas’ feet off the ground, he soon handed the CEO role to Hua Mu. The two developed a working relationship while Moulder was getting Tesaro running and Mu served as the CMO of HutchMed.
It’s not yet clear where Zenas will aim to specifically develop its new asset, with Mu saying only in a press release it has the “potential to treat numerous autoimmune diseases.” In a follow-up request for comment, company spokesperson Lauren Bartlett told Endpoints News Zenas is not currently disclosing any particulars about disease areas.
This article has been updated to include comment from Zenas’ spokesperson Lauren Bartlett.