- Johnson & Johnson has terminated a trio of licensing deals with Aduro Biotech, threatening a key source of income for the clinical-stage cancer immunotherapy specialist.
- The drugmakers first linked up in May 2014, when J&J's Janssen unit signed two agreements that gave it exclusive rights to Aduro's GVAX vaccine platform for prostate cancer and product candidates containing ADU-741, a live, attenuated, double-deleted (LADD) strain of the gram-positive Listeria created through the biotech's LADD technology.
- A third deal was inked in November 2014, handing Janssen exclusive rights to all product candidates containing Aduro's ADU-214, a similar Listeria strain that has the potential to stimulate an immune response to cancer by encoding multiple tumor-associated antigens. In both the ADU-214 and ADU-741, Aduro was eligible for hundreds of millions of dollars in milestone payments.
Cancer drugs have become increasingly important to J&J's bottom line. In the second quarter, they raked in $2.46 billion for the big pharma, accounting for roughly 25% of total sales from its pharmaceutical unit. That's greater than the same period a year prior, when J&J's oncology unit was responsible for 20% of total pharmaceutical sales.
Driving that uptick were the multiple myeloma treatment Darzalex (daratumumab), blood cancer drug Imbruvica (ibrutinib) and prostate cancer therapy Zytiga (abiraterone acetate). Acknowledging such performances, J&J CEO Alex Gorsky said on the company's most recent earnings call that "continued patient penetration in oncology areas of prostate cancer and hematology" would serve as a catalyst for further growth in 2018.
Those focuses aren't exactly new for J&J, however. Its ADU-741 and GVAX agreements with Aduro focused on prostate cancer, offering J&J an exclusive, worldwide license to certain immunotherapies "specifically engineered" with LADD technology to treat the disease.
According to Aduro, the ADU-741 deal gave the biotech $12 million through an upfront payment and a $10 million milestone payment for completing specific development activities. There was also another $343 million in potential milestones plus royalty payments for any collaboration products that made it to market.
The GVAX and ADU-214 partnerships were similarly structured, though the former had much less money on the line. Aduro said in its last annual filing that it received $30 million upfront, a $21 million milestone payment and could take home as much as $766 million in additional milestone payments through the ADU-214 deal, whereas the GVAX deal offered $500,000 upfront and up to $2 million in potential commercial milestones.
J&J's decision to terminate those deals now puts pressure on Aduro to hold onto its other big pharma partners, Novartis and Merck & Co.
Last year, collaboration and license revenue accounted for essentially all of Aduro's $17.2 million in annual revenue — more than 99%. And by the end of June, all of the biotech's revenue was coming from these sources.
Aduro shares were down more than 4% to $6.87 apiece at market's open Tuesday.