- Gilead will pay $275 million to buy 49.9% of privately held Pionyr Therapeutics and secure an option to acquire the rest of the company for another $315 million should early human tests of the startup's experimental cancer drugs prove promising.
- Pionyr's cancer immunotherapy drugs are meant to turn immune cells within tumors against the disease itself, a technique it calls "myeloid tuning. "The company believes its two drug candidates could be used in patients who don't respond to immunotherapies like Merck & Co.'s Keytruda and Bristol Myers Squibb's Opdivo.
- The investment extends a streak of dealmaking by Gilead in oncology, a renewed focus for the company under CEO Daniel O'Day. In just over three months, the California-based biotech has thrown more than $5.5 billion at companies developing immune therapies to fight cancer in a bid to diversify its pipeline away from antiviral drugs.
Pionyr was co-founded by University of California, San Francisco professor Max Krummel, who was involved in research that led to Yervoy, the first of a new class of cancer immunotherapies to come to market. His work on the "tumor microenvironment" — the proteins and cells that surround a tumor and can thwart a response to treatment — was spun into Pionyr.
The company raised an $8 million Series A round in January 2017 and followed that with a $62 million Series B in December of that year.
In the tumor microenvironment, certain myeloid cells can help shut off an immune response meant to stifle the growth and spread of cancer. Pionyr's hypothesis is that immunosuppressive myeloid cells could help explain why some patients do not respond to checkpoint inhibitors like Keytruda or Opdivo, and why newer immunotherapy drugs haven't shown as much promise.
Pionyr has two drugs in pre-clinical development, PY314 and PY159, which aim at proteins called TREM1 and TREM2, respectively. PY314 targets and destroys myeloid cells that suppress an immune response, while PY159 seeks to reprogram some of those suppressive cells to alert immune cells instead.
The company isn't alone in trying this type of approach. Bristol Myers, Novartis, Eli Lilly, Amgen and Roche all have experimental drugs targeting a protein called CSF1R, which modulates the activity of myeloid cells.
Under the terms of Tuesday's deal, Gilead will take a 49.9% stake in Pionyr and provide funding for PY314 and PY159. The deal also gives Gilead an exclusive option to buy the remainder of Pionyr for $315 million by the end of Phase 1b testing, while promising more than $1 billion in potential milestone payments if the two drugs are successful.
The agreements are part of a years-long effort by Gilead to develop a cancer drug business, largely through M&A. Its two oncology products — the blood cancer drug Zydelig and the cell therapy Yescarta — both came from buyouts.
But cancer medicines only generated $559 million of Gilead's $22.1 billion in sales in 2019. Gilead has aimed for more during its recent string of deals, which each focus on next-generation cancer immunotherapies.