Five Prime hitches onto Bristol-Myers' blockbuster-in-waiting immunotherapy

Bristol-Myers Squibb ($BMY) has signed a deal with Five Prime Therapeutics ($FPRX) to determine whether a combination of its star immuno-oncology contender and the biotech's antibody can make a difference in a range of cancers.

Under the agreement, Bristol-Myers will hand over $30 million and pay for a Phase I study combining nivolumab, its PD-1 checkpoint inhibitor, with FPA008, Five Prime's treatment targeting a protein called CSF1R. Five Prime is responsible for conducting the trial, which the partners expect to begin next year, looking to establish the safety, tolerability and preliminary efficacy of their medicines in tandem.

Bristol-Myers' therapy is designed to galvanize an immune system attack on tumors by blocking a pathway called PD-1, which, left unchecked, allows cancerous cells to pass undetected. Nivolumab, approved in Japan as Opdivo, is widely considered to be the most promising among a new crop of treatments that block PD-1 or the related PD-L1, a class that includes entries from Merck ($MRK), Roche ($RHHBY) and AstraZeneca ($AZN). Analysts expect the market for such antibodies to peak north of $35 billion a year, estimates driven up by early data suggesting that cancer-treating cocktails featuring checkpoint inhibitors could transform the standard of care for many cancers.

That's where Five Prime comes in. Preclinical data suggest that targeting PD-1 and CSF1R at the same time could lead to a broader anti-tumor immune response than either method alone, the company said, and positive results could help FPA008, once approved, cut in on the explosive sales expected for nivolumab. Five Prime's shares rose more than 18% on the announcement Monday morning.

On its own, FPA008 is in the midst of a Phase I trial in rheumatoid arthritis, and Five Prime believes it has potential as a monotherapy for solid tumors, idiopathic pulmonary fibrosis, lupus nephritis and other inflammatory disorders.

In the meantime, the biotech has the benefit of fleshing out FPA008's potential on Bristol-Myers' dime, putting the combo up against on-small cell lung cancer (NSCLC), melanoma, head and neck cancer, pancreatic cancer, colorectal cancer and malignant glioma.

Five Prime CEO Lewis Williams

"(Bristol Myers') vision aligns with our commitment to advancing promising immune-modulating targets, alone or in combination, to create next-generation immunotherapies for cancer patients," Five Prime CEO Lewis Williams said in a statement. "We look forward to initiating this study and expanding the development of FPA008 as a potential immunotherapy for these 6 types of cancer."

Meanwhile, Bristol-Myers is racing to the FDA with its PD-1 blocker, planning to hand in a melanoma application this quarter, well ahead of Wall Street's expectation of a mid-2015 submission. The company is also working through a rolling FDA submission for nivolumab in NSCLC, expecting to complete that filing by year's end. The company's sweeping clinical program for nivolumab includes more than 50 trials, investigating the drug in renal cell carcinoma, head and neck cancer, glioblastoma, and non-Hodgkin lymphoma, among other malignancies.

- read the statement

Special Report: The top 15 late-stage blockbusters in the pipeline - Nivolumab, Bristol-Myers Squibb

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