Celgene Targets New Immuno-Oncology Frontier With Agios Deal

| About: Celgene Corporation (CELG)
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Not content with being involved in the anti-PD-L1 space, Celgene (NASDAQ:CELG) is taking aim at novel immuno-oncology targets with a beefed-up deal with its long-time collaborator Agios (NASDAQ:AGIO). The agreement, worth $200m up front, yet again shows that Celgene is not afraid to splash out on early-stage assets: none of Agios’ metabolic immuno-oncology assets have even made it to the clinic.

The companies are keeping quiet about potential targets, but Agios's chief scientific officer, Scott Biller, said during a conference call these were "not on the radar screen of other research groups. We’re not planning on doing anything that follows what others have done, like IDO or TDO [inhibition].”

Checking out new checkpoints

Celgene already has a foot in the immuno-oncology space through a deal to develop AstraZeneca’s (NYSE:AZN) PD-L1 inhibitor durvalumab in haematological cancers (Celgene signals bigger immuno-oncology push into blood cancers, April 24, 2015).

IDO and TDO inhibitors could represent the next wave of immuno-oncology drugs, but there is already a fair amount of competition there, with the likes of Incyte (NASDAQ:INCY) and NewLink Genetics (NASDAQ:NLNK) in phase II with IDO inhibitors, and big pharmas like Merck & Co (NYSE:MRK), Pfizer (NYSE:PFE) and Roche (OTCQX:RHHBY) with preclinical projects.

Agios and Celgene are looking for immuno-oncology white space, aiming to increase response rates and survival, and expanding the tumour types that can be treated versus current immunotherapies.

It might be a while before details on its targets emerge – Mr. Biller said Agios planned to stick with its policy of not disclosing specific information until the start of clinical trials.

The deal covers a four-year period, which can be extended by two years for an undisclosed amount. Agios will lead early development and will receive a $30m licence fee for each programme that Celgene opts into.

The companies will split costs and profits 50/50, with Agios receiving up to $169m in clinical and regulatory milestones for each. Celgene also has one chance to pick a program for a 65/35 split, for which Agios could receive milestones of up to $209m.

AG-120 returned

The new agreement will also see Agios get back global rights to its IDH-1 inhibitor AG-120, which is in phase II for acute myeloid leukaemia.

As for Agios’ other IDH inhibitors, Celgene will continue to lead development of AG-221, in phase III in AML, and the companies are jointly developing AG-881, in phase I for various cancers with a likely long-term focus in glioma.

Agios executives played down the significance of AG-120’s return, with chief executive David Schenkein saying the company’s commitment to the asset was “as strong as it was before”. But Celgene’s willingness to relinquish rights raises questions about the value of the program, Leerink analysts wrote.

It also leaves Agios on the hook for the cost of a phase III trial of AG-120 in AML, expected to start in the second half. The company also has two more wholly owned assets in the form of AG-348 and AG-519 in the rare disease pyruvate kinase deficiency.

However, Agios will probably not be complaining: it now expects to end 2016 with $390m in cash, up from $180m previously, and has enough money to last until mid-2018.

Celgene has been making an aggressive push into immunotherapy: as well as the AstraZeneca deal it has partnered with Juno and Bluebird Bio in the much-hyped CAR-T space (Interview – Despite the many unknowns Celgene banks on CAR-T take-off, April 18, 2016). The latest agreement with Agios gives it another high-risk but potentially high-reward play in an unproven drug class.