Bristol pens 'armed' early-stage cancer virus deal with U.K.’s PsiOxus

BMS has been on something of a biotech deal frenzy in recent years but this month said it would be retooling its R&D.

Bristol-Myers Squibb has signed a new preclinical deal with British biotech PsiOxus to work on its oncolytic virus NG-348 in a deal that could be worth just shy of $1 billion.

Oxford, U.K.-based PsiOxus gets $50 million upfront and could get as much as around $900 million in biobucks if it hits its marks in testing and beyond.

This is the second collab between the two this year, after the pair announced a deal in the summer to combine PsiOxus’ lead product enadenotucirev, its phase 1 oncolytic adenovirus therapeutic, with BMS’ Opdivo (nivolumab) in a range of tumor types in late-stage cancer patients. For this deal, PsiOxus got a one-off $10 million payment.

The biotech’s earlier stage NG-348 virus uses PsiOxus’ tumor-specific immuno-gene therapy (T-SIGn) platform to “arm” the virus with two additional immuno-therapeutic transgenes.

In essence, it is designed to drive T-cell immune responses locally within the tumor microenvironment. It is a transgene-modified variant of PsiOxus’ enadenotucirev virus that encodes two immunomodulatory MiTe proteins in its genome.

Bristol-Myers will be solely responsible for clinical development and commercialization activities for the med, while the Big Pharma will also be responsible for providing PsiOxus undisclosed funding to “support activities related to the preclinical development of NG-348.”

“NG-348 represents the first of our T-SIGn armed-viruses,” stated John Beadle, chief executive officer of PsiOxus. “We are thrilled to partner once again with Bristol-Myers Squibb, a leader in immuno-oncology, to drive this program into clinical development with the aim of providing a potential treatment to cancer patients.”

This deal forms part of a wider push into this new class of cancer drug, although one that has seen some clinical setbacks and a weak showing when on the market.

Back in October last year, Amgen gained FDA approval for the first oncolytic virus-based drug, Imlygic (talimogene laherparepvec), for the treatment of melanoma lesions in the skin and lymph nodes.

Amgen gained access to the drug, which uses a re-engineered form of the herpesvirus, in 2011, when it paid $425 million, plus $575 million in potential milestone payments, to acquire Imlygic from its original inventor Biovex.

Amgen’s drug however had a rocky road to approval with several trial hiccoughs, and is estimated by analysts to only make around $200 million a year in peak sales.

A handful of other smaller biotechs and pharmas, such as upstarts Turnstone Biologics and Oncorus, as well as Big Pharma Boehringer and even Duke University, are also looking to create similar therapies.

All of this comes amid a biotech deal frenzy from BMS over the past two years, including a $1.25 billion buyout of fledgling Flexus, and more than $1 billion combined for Sweden’s Cormorant Pharmaceuticals and biotech startup Padlock Therapeutics in the summer.

But this month, the company announced a major retooling of its R&D that will see more investment in some areas, and shuttering of R&D sites in others, with no word yet on staff cuts.

This comes a few months after its shining hope Opdivo fluffed its lines in a first-line lung cancer test, something that will likely hit its sales projections hard in the coming years. BMS has said however that the decision to rework its R&D was not made as a result of the Opdivo trial setback.