Bay Area's Calithera Biosciences Rockets After Getting $53 Million Upfront in Cancer Deal With Incyte

Bay Area's Calithera Biosciences Rockets After Getting $53 Million Upfront in Cancer Deal With Incyte January 30, 2017
By Alex Keown, Breaking News Staff

SOUTH SAN FRANCISCO –Shares of Calithera Biosciences are up more than 30 percent this morning after inking a research and licensing deal potentially worth up to $750 million with Delaware-based Incyte Corporation .

Incyte and Calithera will combine forces to develop Calithera’s experimental small molecule arginase inhibitor CB-1158 in hematology and oncology. CB-1158 is currently being studied in a monotherapy dose escalation trial and additional studies are expected to evaluate CB-1158 in combination with immuno-oncology agents, including anti-PD-1 therapy. Arginase is an enzyme produced by immunosuppressive myeloid cells, including myeloid-derived suppressor cells (MDSCs) and neutrophils, which prevents T-cell and natural killer (NK) cell activation in tumors. As an immunosuppressive, arginase depletes the amino acid arginine in the tumor microenvironment. That prevents activation and proliferation of the immune system’s cytotoxic T-cells and NK-cells. Inhibition of arginase activity reverses this immunosuppressive block and restores T-cell function, Calithera said in a statement.

Susan Molineaux, chief executive officer of Calithera, said CB-1158 is expected to be evaluated in multiple trials to accelerate its development across hematological and oncological indications.

Reid Huber, chief science officer at Incyte, said that although Arginase-expressing tumor-infiltrating myeloid cells can play an important role “in orchestrating the immune suppressive microenvironment in cancer.” However, he said to date, “therapeutic targeting of the arginase enzyme has remained elusive.”

“The addition of this first-in-class, small molecule arginase inhibitor, CB-1158, to our portfolio expands our innovative immuno-oncology pipeline and allows us to continue to advance our mission of discovering and developing immune-active combination therapies to treat patients with cancer,” Huber said in a statement.

Under terms of the deal Calithera will receive $53 million in upfront money. That includes $45 million in cash and an $8 million equity investment by Incyte. When milestones and potential royalties are factored in, the deal could be worth about $750 million for Calithera. Incyte will receive worldwide rights to develop and commercialize CB-1158 in hematology and oncology and Calithera will retain certain rights to research, develop and commercialize certain other arginase inhibitors in certain orphan indications. Incyte will fund 70 percent of global development and Calithera will be responsible for the remaining 30 percent. The transaction with Calithera is expected to close in the first quarter of 2017.

The deal with Calithera marks the second immuno-oncology deal Incyte has struck within the past eight weeks. In December, Incyte forged a deal with Netherlands-based Merus NV to develop bispecific antibodies for immuno-oncology purposes.

Incyte’s Jakafi, a JAK1 and JAK2 inhibitor to treat polycythemia vera, is expected to become a billion dollar drug by 2020. In addition to Jakafi, Incyte also has Iclusig in its pipeline, a leukemia drug it acquired the European rights for from Ariad Pharmaceuticals last year.

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