GlaxoSmithKline dumps Five Prime's cancer drug in the midst of Phase I

Five Prime CEO Lewis Williams

GlaxoSmithKline ($GSK) is cutting ties with Five Prime Therapeutics' ($FPRX) in-development cancer therapy, backing out in the middle of a mesothelioma trial.

GSK gave Five Prime a 180-day notice that it's nixing its license to the company's FP-1039, which is designed to block the spread of cancer by interrupting protein signaling. The decision follows GSK's January move to stop developing FP-1039 in squamous non-small cell lung cancer due to the rise of immuno-oncology therapies from Merck ($MRK), Bristol-Myers Squibb ($BMY) and others, citing a "change in treatment paradigms."

Now GSK is set to abandon a drug it inherited through its $3 billion acquisition of Human Genome Sciences in 2012, leaving Five Prime to go it alone in an ongoing Phase Ib study testing FP-1039 against mesothelioma. Five Prime said it plans to work with GSK to complete enrollment in the study, adding that it "continues to be encouraged" by the drug's potential in mesothelioma.

While GSK is backing away from Five Prime's oncology pipeline, the two companies remain partnered up in respiratory R&D. In 2014, GSK re-upped with Five Prime on a discovery-focused partnership to develop new therapies for refractory asthma and COPD. The expanded deal follows a 2012 tie-up between the two companies, and Five Prime is in line for up to $193.9 million per project.

Five Prime is still riding high on an October agreement with Bristol-Myers through which it pocketed $350 million up front and signed up to reap as much as $1.4 billion more in exchange for the rights to an immunology program. Bristol-Myers bought into Five Prime's antibody's for colony stimulating factor 1 receptor, including lead asset FPA008, in hopes of pairing the immune-regulating treatments with its own cancer therapies. Five Prime's shares are up about 82% since the deal.

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