Roche backs out of its $1B cancer deal with Molecular Partners

Molecular Partners CEO Christian Zahnd

Roche ($RHHBY) is terminating its collaboration with Molecular Partners, nixing an oncology partnership worth up to $1 billion as it reshuffles its pipeline.

The pair had been working together under a 2013 agreement centered on Molecular Partners' proprietary DARPin technology, which creates genetically engineered proteins that can mimic antibodies and bind to specific targets anywhere in the body. The idea was to discover and develop cancer treatments using the cell-destroying Pseudomonas exotoxin, and Roche promised about $57 million up front with up to $1 billion more tied to development and sales milestones.

Now, Roche is backing away from Pseudomonas exotoxin en masse, Molecular Partners said, which puts a halt to the DARPin deal. Molecular Partners isn't saying how many candidates came out of the collaboration, but the company plans to evaluate whether to press on without Roche in exotoxin R&D.

"We discussed other areas of mutual interest, but given our own proprietary focus on immuno‐oncology, it made no sense to amend the current collaboration," Molecular Partners CEO Christian Zahnd said in a statement. "This way, we can avoid working on potentially competing pathways."

The Swiss company, which went public on its local exchange last year, saw its share price fall about 6% on the news.

While Roche is out the door, Molecular Partners recently deepened its relationship with another co-developer. In May, Allergan ($AGN) disclosed plans to press forward with a DARPin-powered treatment for wet age-related macular edema, a common cause of blindness. The company is also working with Johnson & Johnson ($JNJ) in immunology.

Since pulling off its $100 million IPO in November, Molecular Partners has increasingly focused on its in-house, unpartnered assets. Most advanced is the Phase I MP0250, a bispecific blocker of VEGF and HGF for solid tumors, followed by MP0274, a HER2-targeting cancer treatment. The biotech also has two early-stage prospects in immuno-oncology and another pair of undisclosed programs in ophthalmology.

- read the statement (PDF)

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