Pfizer strikes another immunotherapy deal to widen its oncology pipeline

With its designs on AstraZeneca ($AZN) at least temporarily abandoned, Pfizer ($PFE) has set out to create an immuno-oncology portfolio of its own, signing a deal with a Belgian biotech to get its hands on treatments that promise to sharpen the body's anticancer weaponry.

Pfizer has agreed to pay iTeos Therapeutics €24 million ($30 million) up front for the exclusive rights to some preclinical candidates, also making an undisclosed equity investment in the company and promising untold milestone payments down the line.

Through the deal, Pfizer gets some early-stage drugs that target IDO1 and TDO2, cancer-expressed enzymes that break down tryptophan, which is integral to the immune system's ability to recognize tumors. By blocking the enzymes, iTeos' candidates can unblind the body's defenses and help T cells better attack malignancies, Pfizer said. And, beyond collaborating on IDO1 and TDO2 blockers, iTeo and Pfizer have agreed to work together to discover and validate new immuno-oncology targets.

The deal could be read as further evidence that Pfizer has moved on from its pursuit of AstraZeneca, a $118 billion gambit driven largely by the allure of the latter company's oncology pipeline. Last month, Pfizer signed up to pay Merck KGaA $850 million up front and as much as $2 billion more in order to cut in on a host of cancer immunotherapies, a sign the company is committed to catching up with the leaders in the space, a group that includes Merck ($MRK), Bristol-Myers Squibb ($BMY) and Roche ($RHHBY).

Pfizer's Robert Abraham

"This collaboration with iTeos is another important step for Pfizer as we continue to build an industry-leading pipeline of cancer immunotherapeutics, a critical facet of which is the promising class of small-molecule immunomodulators," Pfizer Oncology Chief Scientific Officer Robert Abraham said in a statement. "With iTeos' strong expertise and experience in tumor immunology, this collaboration is well-positioned to help us deliver on our commitment to help bring new therapies to patients."

As for iTeos, Pfizer's co-sign is big news for a small biotech in the early days of operation. The Gosselies, Belgium-headquartered company was formed in 2012 by Ludwig Cancer Research and Universite Catholique de Louvain, raising €9 million ($11 million) in seed funding to build out an oncology discovery platform.

- read the statement