Dive Brief:
- Sanofi has formed a wide-ranging alliance with IGM Biosciences, marking the latest in a string of collaborations and acquisitions the French pharmaceutical company has used to bolster its pipeline of cancer and inflammatory disease drugs.
- Per deal terms, Sanofi will pay IGM $150 million upfront to co-develop drugs aimed at three cancer targets and three inflammation targets. The deal is heavily backloaded, with IGM eligible to receive roughly $1 billion per program, and over $6 billion total, in payments tied to clinical, regulatory and commercial milestones.
- IGM will lead research and cover the costs of each inflammation program through Phase 1 testing, and all the way to approval for each oncology candidate. IGM would get royalties on inflammation drugs but be able to evenly split profits, in certain major markets, for the cancer medicines. The biotech's shares climbed as much as 40% on the announcement, though they've lost most of their value since peaking early last year.
Dive Insight:
Sanofi has made clear its intention to rejuvenate its research, particularly in cancer and immunology, through dealmaking. Last year the company was one of the industry's most active acquirers, spending more than $6 billion on five deals, according to BioPharma Dive's M&A database.
Those deals have provided access to a variety of modalities, from experimental cell therapies to messenger RNA. But antibody drug technology has emerged as a focus as well, especially newer approaches Sanofi is hoping can overcome some of the field's limitations.
A $1 billion acquisition of privately-held Amunix in December, for instance, is meant to lead to safer alternatives to the bispecific antibodies that have become popular with many drugmakers. Two weeks ago, Sanofi partnered with SeaGen to make antibody-drug conjugates, a type of tumor-targeting medicine that has been the at the center of several industry deals in recent years. And now, the pharma giant is wagering as much as $6 billion on IGM, which is attempting to pioneer an entirely new class of antibody drugs.
As with any gamble on early technology, those bets come with risks. Amunix, when it was acquired, didn't yet have a drug in clinical testing. IGM's most advanced drug, meanwhile, is in early clinical testing in lymphoma. Sanofi is also buying in just three months after IGM disclosed disappointing results that caused the biotech to lose more than half of its market value.
As its name suggests, IGM is developing synthetic versions of the IgM antibodies found in blood and lymphatic fluid, not the more common IgG antibodies that most drugmakers are pursuing. IgM antibodies have more binding sites than their counterparts, which the biotech believes could lead to more potent drugs that attach more strongly to their targets. IGM rode that promise to, for a time, one of the top performing biotech IPOs of 2019. Last February, shares traded at more than $107 apiece, nearly seven times IGM's initial $16 stock price.
All of that value has since been erased, however, amid both a broad biotech downturn and IGM's own struggles standing out in an increasingly competitive field. Bispecific antibodies from Roche, Regeneron and others have shown substantial promise in lymphoma, raising the bar for IGM's early entry — a treatment called IGM2323. Results disclosed at the American Society of Hematology raised questions as well, as the drug, while potentially safer than its rivals, wasn't as effective.
"Unless the drug is a 'great' combination drug," wrote Jefferies analyst Chris Howerton in February, "its utility is likely to be more limited than the competition."
The Sanofi deal doesn't include IGM's recent work in infectious diseases, including an antibody drug for COVID-19 that began two Phase 1 clinical trials last month.