Roche's cancer immunotherapy quest spurs $422.5M Inovio combo deal

Roche today made a $10 million down payment to expand its work in the hot cancer immunotherapy field, promising Inovio up to $412.5 million in milestones and dangling the prospects of additional payments if the work takes off. The deal puts Roche--a leader in oncology and a top contender in the immunotherapy field--in the driver's seat on two preclinical therapies that could help marshal a targeted T-cell attack on cancer.

Roche ($RHHBY) says it was drawn to two of the biotech's ($INO) pipeline projects--INO-5150 and INO-1800--because of their potential to combine these therapies with other immunotherapies already in the pharma giant's oncology portfolio. Blue Bell, PA-based Inovio, which takes every opportunity possible to tout its animal data, says that 5150 demonstrated an efficient ability to target prostate-specific membrane antigens in monkeys. 1800, meanwhile, was able to eliminate liver cells in mice, offering a new shot at preventing hepatitis B infection that could thwart the development of liver cancer.

"At Roche we are always interested in finding first-in-class and best-in-class therapies that may become the next generation treatments for patients with different types of cancer," says Hy Levitsky, the head of cancer immunology experimental medicine. "INO-5150 will allow promising combination opportunities with the Roche portfolio, particularly with our emerging cancer immunotherapy molecules." 

Roche is an ideal, deep-pocket partner for any biotech, and investors responded warmly to the idea that Inovio had found a marquee player to work with. The biotech's shares soared 28% in pre-market trading this morning. 

Roche joined Merck ($MRK) and Bristol-Myers Squibb ($BMY) in the spotlight at ASCO this summer. While its rivals are racing ahead with clinical-stage PD-1 drugs designed to take the brakes off the immune system and unleash an attack on cancer, Roche is focused on MPDL3280A, which targets the PD-L1 receptor on cancer cells. The companies have two different approaches with the same goal in mind, which is blocking the interaction of PD-1 and PD-L1, thereby interfering with a process that hides cancer cells from the immune system. But immunotherapy includes several strategies, and adding two together into a one-two punch from the immune system is likely to enhance the potential of this already promising field.

In a morning conference with analysts Inovio CEO Joe Kim said that Roche will take over the immunotherapy work on these two drugs, paying all the R&D costs. The lead program is 5150, which Kim said should be in a Phase I study in a couple of months. 

One caveat: Even while investigators have been going all-out to speed up these R&D programs in the race to the market, preclinical approaches that have yet to be tested in humans are both highly risky and require significant exposure in humans before they can win regulatory approval. And no company in the business understands that better than Roche, which is starting small in the Inovio deal in the hope that this new partnership could end with a big advance.

- here's the press release

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