Incyte, Agenus partner on immuno-oncology targets in $410M deal

Incyte CEO Hervé Hoppenot

Incyte ($INCY) is jumping aboard Agenus' antibody discovery platform, signing up to partner on new immuno-oncology drugs with $60 million in cash and promises of up to $350 million in milestones. And the deal news quickly drove up Agenus' ($AGEN) shares by more than 30% in premarket trading.

At the heart of this deal is a slate of checkpoint regulators: GITR, OX40, LAG-3 and TIM-3. While PD-1/PD-L1 has captured the full attention of the biopharma industry and a large segment of the investment community, these four other targets also promise to play a role in a new generation of cancer therapies that has been inspiring a wave of new deals just like this. The goal is to find new ways to mix and match therapies that spur an immune system attack on various cancers. And Incyte, which is already partnered with several of the leaders in the field, is setting out to stake out some prime territory in the second wave of immuno-oncology drugs taking shape in the pipeline.

That's where Agenus' antibody platform comes in. Agenus built a mixed reputation in the troubled field of cancer vaccines, looking to spur an attack while immuno-therapeutics strip out a cloaking device that hides cancer cells--a far more promising field. But early in 2014 it bought 4-Antibody and its IO tech and then quickly turned around to do a partnership deal with market leader Merck. This new pact with Incyte marks another big payback on a deal that cost Agenus only $10 million in stock, up front.  

In this deal Incyte is paying Lexington, MA-based Agenus $25 million upfront and investing another $35 million in Agenus stock. They plan to split the costs--and profits--on their GITR and OX40 antibody programs, adding milestones for Agenus, while Incyte will cover the costs on TIM-3 and LAG-3 and hand out milestones and royalties on any products. Agenus gets up to $155 million in milestones on each royalty-bearing product and $20 million for the profit-sharing products.

For Incyte, which has attracted considerable attention with its INCB24360, an indoleamine 2, 3-dioxygenase (IDO) inhibitor, the deal also helps highlight pacts with heavyweight partners like Merck ($MRK).

"This alliance with Agenus adds therapeutic antibody capabilities to our proven small molecule discovery expertise, significantly expands the landscape of potential immuno-oncology targets available to us, and strengthens our ability to identify and advance novel therapeutic combinations," said Hervé Hoppenot, the CEO of Incyte.

- here's the release

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