J&J commits $740M for its second cancer R&D pact with MacroGenics


Whatever Johnson & Johnson ($JNJ) learned about MacroGenics’ off-the-shelf approach to stirring a T cell attack against cancer since inking their first partnership deal 17 months ago seems to have only whetted the pharma giant’s appetite for more. 

Janssen has stepped back to the deal table to scoop up global rights to a second bispecific molecule--MGD015--which is able to target both CD3 and an undisclosed target that would make it useful in the fight against hematologic cancers as well as solid tumors. And they say MacroGenics’ ($MGNX) bispecific tech makes it a simpler, preferable alternative to personalized CAR-T tech, a hot favorite in oncology R&D over the last two years.

“I can’t reveal the specifics of the target,” MacroGenics' CEO Scott Koenig tells me, adding that Janssen “wants to keep it under wraps. It’s a molecule over-expressed in liquid and solid tumors.” The preclinical data looked strong and “they became aware of it and were very interested in the deal.”

J&J--which has been aggressively expanding its cancer drug pipeline in the last few years--is spending a whopping $75 million on the upfront, unusually large for a preclinical project. There’s another $665 million in milestones on the table. And MacroGenics retains an option to fund part of the late-stage development work on MGD015 in exchange for a share of the profits in the U.S. and Canada.

J&J is clearly enthusiastic about its chances of leapfrogging some of the most closely-watched programs in the industry pipeline. The company paid $125 million upfront in fees and an equity stake for rights to MGD011, a CD19/CD3 drug for B-cell malignancies, at the end of 2014.

One of the reasons for J&J’s interest was the way its two programs can work synergistically with each other as well as other therapies, says the CEO, including checkpoint inhibitors. “There’s no doubt that if a tumor is expressing both antigens that these things can work in a complementary fashion,” says Koenig.

Both of the Janssen drugs emerged from Rockville, MD-based MacroGenics’ Dual‐Affinity Re‐Targeting, or DART, platform. The platform has spawned a slate of projects at MacroGenics, including a one-two checkpoint punch aimed at PD-1 and LAG-3. Its most advanced therapy is the monoclonal antibody margetuximab, a HER2-targeting drug in Phase III for breast cancer.

This latest licensing deal with J&J comes right after MacroGenics moved into a larger facility in Rockville as it adds new manufacturing capability as well as new hires.

For MacroGenics, this new deal offers a chance to continue to add to its financial reserves during a time of explosive growth. The company’s staff, now at 287, doubled over the last 18 months and should soon pass the 300 mark. In the meantime, the biotech is planning to present data on MGD010 on June10 and later in the year execs will be updating enoblituzumab (B-7, H-3), adding an MGD006 update and waiting for Janssen to produce data on MGD011.

MacroGenics was named a Fierce 15 company in 2013 and went public in the fall of 2013 in a popular IPO. But like a lot of biotechs, its shares have plunged in recent months, losing more than half of their value off the 12-month high.

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