Calithera shares jump on Incyte deal
- Incyte has hooked up with San Francisco company Calithera Biosciences, gaining worldwide development and commercialization rights to an early Phase 1 oral small molecule arginase inhibitor, CB-1158 in hematology and oncology.
- Calithera keeps certain rights in orphan indications and gets a $45 million payment upfront, with $8 million in equity investment now, and potential for up to $430 million in milestones with low- to mid-double digit royalty payments in the future. The development costs will be split between Incyte and Calithera 70%/30%, and future U.S. profits and losses divided 60%/40%.
- The deal should close in the first quarter of 2017; on a day when markets were volatile, small cap Calithera's shares climbed by over 45% on the news.
Calithera's focus is on metabolic immuno-oncology, and CB-1158 fits well into Incyte's growing immunotherapy pipeline, as well as adding access to another target for the larger company. Analysts at Jefferies describe CB-1158 as "a scientifically interesting asset overlapping well with Incyte's immunooncology expertise," adding "CB-1158's differentiated IO mechanism fits well within Incyte's area
The split of the development costs and profits spreads the risk across the two companies, but there is a certain amount of flexibility included; if Calithera decides to opt out of the co-funding deal it will lose the access to the U.S. profits but could gain additional milestones of up to $750 million.
Development is at an early stage but preliminary data showed increased levels of arginine in patients with solid tumors.
“In this strategic partnership with Incyte, CB-1158 is expected to be evaluated in multiple trials of novel therapeutic combinations, accelerating its development across hematological and oncology indications,” said Susan Molineaux, Calithera’s CEO.
CB-1158 is in an ongoing Phase 1/2 monotherapy dose escalation trial, but plans to combine it with immuno-oncology agents including the hot-topic anti-PD-1 drugs could increase interest, according to the Jefferies analysts.
Calithera has other big name partners: in December 2016, Calithera signed a deal with Bristol-Myers Squib to assess the combination of its Phase 1/2 glutaminase inhibitor CB-839 with the big pharma's PD-1 checkpoint inhibitor Opdivo (nivolumab) in renal cell carcinoma (RCC).
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