AstraZeneca strikes big, multipart immuno-oncology deal with Innate

AstraZeneca
AstraZeneca's London offices. (AstraZeneca)

AstraZeneca is set to pay Innate Pharma $170 million (€148 million) to license anti-NKG2A antibody monalizumab and secure an option on five other prospects. The multipart deal will see AstraZeneca hand over the upfront cost and commit to billions in milestones to swell its immuno-oncology pipeline.

Innate granted AstraZeneca the option to license monalizumab—a checkpoint inhibitor designed to block functions of NK and cytotoxic T cells—in 2015 in return for $250 million upfront. Since then, Innate has built out the case for monalizumab with clinical data suggesting it could make PD-1/L1 checkpoint inhibitors such as AstraZeneca’s Imfinzi effective in more patients.

AstraZeneca has seen enough to up its bet on monalizumab. The Big Pharma will pay $100 million for the full oncology rights to the drug in the first quarter of next year.

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Innate is in line to receive another $100 million when monalizumab starts phase 3. Beyond that, AstraZeneca is on the hook for up to $400 million in development and regulatory milestones, plus up to $425 million in sales milestones.

The size of the bet on a drug with limited clinical data reflects a belief that monalizumab can help cancer patients who are underserved by current therapies, both by boosting and broadening the efficacy of PD-1/L1 drugs and by providing a better, alternative option to these cornerstone therapies.

AstraZeneca, a latecomer to the PD-1/L1 field, has looked to combination therapies to make up lost ground, but suffered setbacks along the way, most notably when its Imfinzi-tremelimumab cocktail fell short in the Mystic phase 3 lung cancer trial. In monalizumab, AstraZeneca has secured another shot at breaking new ground in immuno-oncology.

The agreement with Innate also gives AstraZeneca a look at earlier-stage candidates. AstraZeneca is paying $50 million to gain an option on preclinical anti-CD39 monoclonal antibody IPH5201, which is designed to reverse tumor immunosuppression by acting on the adenosine pathway. If AstraZeneca takes up its option, it will pay Innate a further $35 million.

AstraZeneca is paying another $20 million for an option on four molecules in Innate’s preclinical portfolio. The Big Pharma will need to pay $35 million per target to exercise its options.

The agreements covering IPH5201 and the four other preclinical prospects all come tied to around $800 million in milestones. Once the milestones across all six assets covered by the deals are tallied, Innate is in line to receive around $5 billion. AstraZeneca is investing $72 million in Innate as well. 

France’s Innate has secured the sizable stream of potential milestones, plus upfront fees, without totally ceding control of the drugs. Innate has the right to co-promote all the drugs in the European Union and take home half the profits, provided it co-funds to late-phase development. The biotech is set to contribute 30% of the cost of the phase 2 and 3 monalizumab trials.

Innate’s interest in having copromotion rights reflect management's plans to establish the company as a fully integrated biotech. Those plans were given a big boost by the final part of the AstraZeneca deal.

Innate is paying $50 million upfront for the U.S. and EU rights to AstraZeneca’s Lumoxiti, a CD22-directed cytotoxin that recently won FDA approval in hairy cell leukemia. The deal provides Innate with a commercial platform that will support Lumoxiti and, if they come to market, the biotech’s wholly owned assets such as IPH4102.

Innate expects to take responsibility for Lumoxiti around the middle of next year. The deal also features a $15 million milestone tied to the EU regulatory submission and a $10 million payment based on U.S. sales next year.

Shares in Innate rose 28% following the news.

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