Post-Sarepta, Art Krieg gets $20M to take a shot at an immuno-oncology Checkmate

Checkmate Pharmaceuticals CEO Art Krieg

A year after getting bounced from a turbulent Sarepta ($SRPT), Art Krieg is prepping for his next act in biotech, snatching a failed lead immunology drug from the dying Zurich-based Cytos Biotechnology and taking a second stab at a near-term success with a new company that will tackle the red-hot immuno-oncology field.

Krieg is CEO of Checkmate Pharmaceuticals and today the biotech is coming out of stealth mode, reporting that it has raised $20 million and is taking ownership of a drug called CYT003. Sofinnova and venBio are putting up the cash for the company, which is based in Cambridge, MA.

The backstory on Checkmate requires a trip down memory lane and a reminder about a few earlier moves involving these pieces on the board. When Krieg was CEO of RaNA Therapeutics, venBio recruited him for a board seat at Cytos at the time CYT003 was being tested as an immune system adjuvant for allergic asthma. It failed a crucial Phase IIb trial in 2014, collapsing the company and setting in motion Cytos' liquidation over the past year.

But …

CYT003 is a member of the CpG class of oligonucleotides, activating the immune system via Toll-like receptor 9 (TLR9). There's been significant research to indicate that activating the immune system in this way could play a major assisting role for drugs like Keytruda and Opdivo, the leading wave of PD-1/PD-L1 drugs that tear down a barrier to an immune system attack. And shortly after getting ousted from his job as CSO at Sarepta, not long before the CEO got the heave-ho in a bitter internal squabble, Krieg found himself lured to the therapy as he was pondering his next move.

Krieg, who was CSO of Pfizer's ($PFE) oligonucleotide therapeutics unit from 2008 to 2011, knew exactly what he was talking about and exactly who to talk to.

Checkpoint inhibitors are all about combination therapies. Spurring an immune system attack can give drugs a better shot at producing a greater impact on cancer cells, and deals have been coming almost hourly now that everyone in oncology is hammering out their own collaborative strategies. And activators like CYT003 are being brought into the mix. Earlier this week AstraZeneca ($AZN), for example, partnered with Inovio ($INO) on a cancer vaccine combo that included an IL-2 immune system activator.

The patients most likely to respond to checkpoint inhibitors now in use or in the clinic have an activated immune system, says Krieg. And as he focused on CpG activators 20 years ago, Krieg is a big believer that he's on to the best approach for achieving an extra boost that could make a significant difference between success or failure. The right activator, he says, could achieve positive results for up to 75% of the right patient population. Also, with two PD-1 drugs on the market, he doesn't need a partner to do the studies, with enough money in hand now to do three smaller studies necessary to gather hard data next year on efficacy for a therapy that already has a clean clinical safety profile.

"We're going to keep the company very small," he says. Usually you'll only find about three people in the biotech's Cambridge office, and he plans to leave it that way, with a deployed development team and a group of CROs and consultants doing the studies under their direction.

In addition to Inovio's activator ("not that great," is Krieg's assessment), comes other activators like Aduro's ($ADRO), a program from Immune Design (CMB305) as well as another CpG (SD-101) from Dynavax ($DVAX).

"It's really kind of an obvious idea," says Krieg. But what is not so obvious is the best technology for this. And that's where little Checkmate can differentiate itself in a big way--and fast. A successful outcome here could set up the company's sale to a key player, he adds, and he and his investors say they have the money and time they need to nail down proof-of-concept data next year.

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