AstraZeneca ups oncolytic virus activity with Transgene deal

Shares in Transgene opened up around 9% following the news. (Transgene)

AstraZeneca has teamed up with Transgene to develop oncolytic virus candidates. The Big Pharma is paying $10 million (€9 million) upfront to get Transgene to apply its oncolytic virus expertise and technologies to the development of five assets. 

Oncolytic viruses have undergone a renaissance in recent years as leading drug developers such as Boehringer Ingelheim, Johnson & Johnson and Merck have identified them as a way to broaden the efficacy of immuno-oncology agents. AstraZeneca bought its way into the field in 2015 when it picked up the rights to a vesicular stomatitis virus program from Omnis, now called Vyriad, but it is not the sponsor of any active studies of the drug on ClinicalTrials.gov.

Now, AstraZeneca has moved to significantly expand its pipeline of oncolytic viruses through a deal with French biotech Transgene. The agreement allows AstraZeneca to pick transgenes to be encoded within the virus and tasks Transgene with taking the resulting candidates through in vitro preclinical testing.

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AstraZeneca will take over once the programs reach in vivo preclinical development and, if it takes up its option on a drug, will remain in charge throughout human development and commercialization. 

In return, Transgene will receive $10 million upfront, plus up to $3 million in preclinical milestones. Further down the line, AstraZeneca may hand over an option exercise payment for each asset, development and commercial milestones and royalties.

AstraZeneca is putting up the money to bolster its long-running, and to date largely unsuccessful, efforts to regain lost ground in the immuno-oncology space by developing combination therapies.

“Oncolytic viruses have the potential to be transformational in oncology by directly causing tumor cell death, and also by delivering a potent payload in a targeted fashion that increases innate and adaptive immune system stimulation,” AstraZeneca Senior Vice President Jean-Charles Soria said in a statement. “AstraZeneca has an exciting portfolio of molecules that we believe may augment oncolytic virus activity.”

The early-stage nature of the agreement means AstraZeneca is some way off from generating clinical data to validate its belief in the potential of the combinations. But it has gained the chance to test its drugs with up to five oncolytic viruses for an upfront fee notably smaller than those Boehringer and J&J paid for preclinical assets. 

Shares in Transgene opened up around 9% following the news. 

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