- Celgene will pay $225 million upfront to gain access to a handful of immuno-oncology candidates from Cambridge biotech Jounce Therapeutics, the companies said Tuesday. The deal also provides for an impressive $2.3 billion in potential development milestones, along with a $36 million equity investment from Celgene.
- Jounce's lead candidate is a monoclonal antibody that activates a protein found on certain T cells, triggering an immune response against solid tumors. It is expected to enter clinical trials this year for testing as both a single agent and combination therapy.
- Under the agreement, Celgene will receive a 40% profit share and ex-U.S. marketing rights (minus royalties) to Jounce’s lead drug. In addition, Celgene has rights to 75% of profits for a second Jounce program, and to 50% for three more. All development costs will be shared by the two companies.
Big pharma-to-biotech firm partnerships have emerged as a leading strategy for startups seeking to finance the R&D of a promising new drug, and Celgene is one of the most frequent buyers—especially when it comes to oncology.
In the past few months, Celgene also committed to at least $250 million in upfront payments to Juno Therapeutics and Agios Pharmaceuticals for options to their respective CAR-T and metabolic cancer programs. Including the Jounce deal and an its $50 million deal with research facilities at the National Cancer Institute, Celgene has invested $525 million upfront in cancer drug licensing deals this year.
Celgene’s aggressive partnering shows it intends to be a player in the evolving market.
The combined deals gives Celgene with a foothold in the hot immuno-oncology space—whether through T-cell, metabolic, or checkpoint inhibitors. Bristol-Myers Squibb and Merck have jumped out to an early lead in immuno-oncology with their first-generation checkpoint inhibitors Opdivo and Keytruda (respectively).
Celgene's propensity for biotech outsourcing is far from new, though. In 2014, for example, the company spent $222 million in upfront payments for licensing deals, significantly higher than the industry average of $70 million that year, according to Bloomberg Intelligence.
And industry-wide dealmaking in oncology has only grown since then. A recent BIO report suggests that 2015 saw the value of upfront payments in oncology licensing deals double to $3.4 billion.
Given these trends, it is no surprise Celgene is once again betting high on biotech innovators to bring the company to the forefront of next-generation immuno-oncology.
“Jounce has built a unique immuno-oncology platform and pipeline with a focus on the development of novel cancer therapies matched to patient populations most likely to respond,” said Robert Hershberg, Chief Scientific Officer of Celgene. “This collaboration allows both companies to leverage broad capabilities in immuno-oncology to bring forward a new generation of product candidates for cancer patients."