Incyte pays MacroGenics $150M for PD-1 inhibitor

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News of the deal comes two years after Incyte paid $25 million for rights to Jiangsu Hengrui Medicine’s anti-PD-1 antibody.

Incyte is paying $150 million upfront for worldwide rights to MacroGenics’ PD-1 drug. The deal, which includes $750 million in milestones, is Incyte’s second attempt to land a PD-1 program to pair with its pipeline of oncology prospects.

MacroGenics' PD-1 drug, MGA012, only moved into the clinic late last year and is still weeks away from posting dose-escalation data. Typically, the huge head start MacroGenics has ceded to Merck, Bristol-Myers Squibb and others would render its drug worthless. But the widespread belief in the value of owning a PD-1 drug for combination purposes means the checkpoint inhibitor field runs on different rules than the broader market.

To Incyte, the drug is worth $150 million upfront plus $750 million in milestones, split between $420 million in development and regulatory landmarks and $330 million in commercial targets. The deal leaves MacroGenics free to use MGA012 in its own combinations.

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Incyte is already testing its IDO1 inhibitor epacadostat in combination with checkpoint inhibitors from Merck and Bristol-Myers Squibb. Going forward, it will be able to develop and sell its drugs together with MGA012, provided it matches up to competitors already on the market. 

That isn’t a certainty, a fact Incyte has already learned the hard way. 

News of the deal comes two years after Incyte paid $25 million upfront and committed to $770 million in milestones for rights to Jiangsu Hengrui Medicine’s anti-PD-1 antibody outside of China.  

RELATED: After partnering with Big Pharmas, Incyte bags its own PD-1 drug

However, the chances of that drug establishing itself as the core of Incyte’s cancer combination strategy waned last month when phase 1 data were presented at the European Society for Medical Oncology. The data drop showed 61% of patients suffered skin capillary hemangioma, a side effect that, in the investigators’ words, was “not seen with prior PD-1 inhibitors.” In a separate study of the PD-1 drug sponsored by Jiangsu Hengrui, 79% of participants experienced hemangiomas. 

One patient dropped out of the Incyte trial because of a hemangioma. That adverse event was classed as grade 1. Most of the adverse events fell into that category or the slightly more severe grade 2.

Many cancer drugs power forward in the face of such mild adverse events but the PD-1 market is different. Doctors and patients can choose from a growing stable of PD-1 drugs that are free from the risk of hemangiomas. Given these options, even mild, drug-specific side effects are enough to derail a program.

MacroGenics is the beneficiary of Incyte’s setback. The antibody specialist has turned a position toward the back of the big pack of PD-1 drugs into a $150 million upfront, vindicating its decision to invest in the program.