OSE Pharma to merge with Effimune to build out immunotherapy pipeline

OSE Pharma (EPA:OSE) has agreed to merge with Effimune. The deal, which would see OSE Pharma shareholders control 71% of the combined company, would result in a pipeline of products to both activate and regulate the immune system.

OSE Pharma CEO Dominique Costantini

Paris, France-based OSE Pharma, which is proposing to relocate to Effimune's home town of Nantes if the merger goes ahead, has built its business around Tedopi, a combination of 10 neo-epitopes designed to turn T lymphocytes against cancer cells. With Tedopi now working its way through a Phase III trial in patients with non-small cell lung cancer, OSE Pharma is looking to build out its pipeline, specifically by adding programs that regulate the immune system.

"The immunological system is working in equilibrium. That means we are working with something that is accelerator and brake," OSE Pharma CEO Dominique Costantini said on a conference call with investors to discuss the deal.

Costantini thinks merging with Effimune will create a pipeline of drugs that can collectively both speed up and slow down immune responses. "In OSE Pharma, we have an immuno-oncology company developing a specific immunotherapy activating T lymphocytes. And we have with Effimune a biotech company specialized in immunoregulation," Costantini said.

Effimune, a spinout from the Institute of Transplantation of Nantes, is focused on keeping immune responses in check. The Nantes-based biotech's lead candidate, a CD28-antagonist currently being investigated in a Phase I trial, is subject to a deal with Johnson & Johnson ($JNJ), which has an option to license the program later this year.

A checkpoint inhibitor is following the J&J-partnered program down the pipeline. While the checkpoint inhibitor is yet to reach the clinic, its presence in the pipeline raises the possibility of combination treatments in the future. OSE Pharma is planning to test Tedopi in conjunction with a checkpoint inhibitor next year.

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