Tox prompts Janssen to drop MacroGenics' cancer antibody

J&J is still on board for another program due to start clinical testing next year.

Janssen is ending a license deal with MacroGenics for duvortuxizumab, a CD19- and CD3-targeting drug for B-cell malignancies it paid $125 million upfront for in 2014, but isn’t severing ties with the biotech entirely.

Johnson & Johnson's pharma division is still on board with MGD-015, a second antibody which combines anti-CD3 activity with an undisclosed second target and is due to start clinical testing in 2018. J&J paid $75 million upfront for the rights to that last year, with up to $665 million in additional payments pending.

Shares in MacroGenics closed up nearly 5% yesterday but started to slide after hours as news of the rejection started to spread, reversing the earlier gain with a 9.5% decline.

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The demise of duvortuxizumab (MGD011) has come about because of safety concerns, and specifically treatment-related neurotoxicity. Despite seeing a number of responses to the therapy, the partners have decided that "given the recent advances in the highly competitive field for the treatment of B cell malignancies, the opportunity for development and commercialization has become less attractive."

The company specializes in drugs that can bind two or more targets in a single molecule, with an emphasis on stimulating immune responses to cancer. It has picked up a series of other big pharma partners, including Takeda, Servier, Pfizer and Boehringer Ingelheim, on the premise that its drugs could provide an alternative to CAR-T therapies.

It may be no coincidence that J&J's decision comes just after Novartis bagged approval for Kymria (tisagenlecleucel), a CAR-T for acute lymphoblastic leukemia (ALL), one of duvortuxizumab's target indications.

This isn't the first time that MacroGenics has lost a big name partner. Two years ago French drugmaker Servier walked away from a $450 million licensing deal for enoblituzumab, A B7-H3-targeting antibody for solid tumors, saying that the program was no longer in its core focus. Servier kept rights to two other early-stage cancer candidates however.

Enoblituzumab remains unpartnered, but is still in early clinical development and is being tested both as a monotherapy and in combination with immuno-oncology drugs, namely Merck & Co's PD-1 inhibitor Keytruda (pembrolizumab) and Bristol-Myers Squibb's CTLA4-targeting Yervoy (ipilimumab).

Right now, MacroGenics' most advanced therapy is the monoclonal antibody margetuximab, a HER2-targeting drug in phase 3 for breast cancer and phase 2 for stomach cancer, and it also has PD-1 and {D-1/LAG-3 antibodies in early stage development.

MacroGenics was named a Fierce 15 company in 2013 and went public in the fall of that year in a well-subscribed IPO. It was trading at under $19 at the time of writing, under its debut price of $26 and well below its peak of more than $40 in early 2014.

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