BeiGene has optioned the rights to Leap Therapeutics’ cancer drug DKN-01 in most of the Asia-Pacific region. The deal gives BeiGene the chance to combine Leap’s anti-DKK1 antibody with its recently approved anti-PD-1 checkpoint inhibitor.
Beijing-based BeiGene ended 2019 by winning approval for its anti-PD-1 antibody tislelizumab in China and began 2020 with a deal for a candidate that could complement the checkpoint inhibitor.
The deal gives BeiGene an option to the rights to DKN-01 in Asia-Pacific countries other than Japan. DKN-01 binds to DKK1, a regulator of Wnt signaling that is overexpressed in some cancers. BeiGene thinks the mechanism may complement that of tislelizumab.
Under the terms of the deal, Leap will run a trial to test that hypothesis. Leap will test DKN-01 in combination with tislelizumab in around 40 patients with second-line gastric or gastroesophageal junction cancers who have tumors that overexpress DKK1. A first-line trial is also planned. Leap is set to start the trials in the first half of 2020.
The studies will generate data to inform BeiGene’s decision about whether to commit more cash to DKN-01. So far, BeiGene has put up $3 million upfront to secure the option on DKN-01 and invested another $5 million in Leap as part of the biotech’s broader $27 million equity financing. Perceptive Advisors joined BeiGene in the equity financing. Leap ended September with $10 million in the bank.
If BeiGene takes up its option, the deal could ultimately be worth far more to Leap. BeiGene is on the hook for up to milestones worth around $130 million plus tiered royalties on sales in the Asia-Pacific region.
BeiGene picked up its $5 million stake in Leap at the biotech’s closing price prior to news of the deal being announced. Following news of the deal, Leap’s share price rose more than 50%, immediately swelling the value of BeiGene’s newly acquired stake.