AstraZeneca continues I-O deal spree with PD-L1 combo trial hookup

AstraZeneca's headquarters in London--Courtesy of AstraZeneca

AstraZeneca ($AZN) has struck its fourth immuno-oncology deal in as many weeks. The latest deal in the flurry of activity sees AstraZeneca hook up with Peregrine Pharmaceuticals ($PPHM) to add another study to the burgeoning list of PD-L1 checkpoint inhibitor combination trials.

Having inked the deal, Tustin, CA-based Peregrine is to test its phosphatidylserine-signaling pathway inhibitor, bavituximab, in combination with AstraZeneca's durvalumab (MEDI4736) in patients with solid tumors. The Phase I/Ib study is intended to establish a dosing regimen for the combination, before going on to see if it is safe and effective in the second stage of the trial. AstraZeneca is hoping bavituximab can boost T cell activity through the modulation of phosphatidylserine, a molecule that is found in the tumor microenvironment and suppresses immune activity.

The deal and the motivations for it are reminiscent of the alliance AstraZeneca entered into with Mirati Therapeutics ($MRTX) earlier this month. In both cases, AstraZeneca has searched out a lesser light of the immuno-oncology sector--the market caps of both companies are sub-$400 million--and entered into low-risk deals. The press release outlining the deal with Peregrine is free from financial details and AstraZeneca is taking a hands-off approach to the initial combination trial, leaving its tiny partner to conduct the study.

Even when it has opened its checkbook to pick up an asset recently, AstraZeneca has avoided the big upfront fees other players in the immuno-oncology field have been willing to pay. In the other two immuno-oncology deals it struck in August, AstraZeneca handed over just $37 million upfront. If the recent deals with Inovio Pharmaceuticals ($INO) and Heptares Therapeutics hit all their milestones, AstraZeneca will pay out a further $1.2 billion. The approach means AstraZeneca has gained a look at multiple immuno-oncology combinations without making a dent on its bank balance.

Such combinations are expected to be pivotal to the eventual success of checkpoint inhibitors, which are tipped to be most effective when another drug has taken apart the defenses used by tumors. If the Peregrine or Mirati trial uncover an effective combination, it could motivate AstraZeneca to write a bigger check to gain an edge over Bristol-Myers Squibb ($BMY), Merck ($MRK) and Roche ($RHHBY) in the scrap for the checkpoint inhibitor market. But failures could raise questions about the approach given the significant rewards on offer and intensity of the competition.

- read the release

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