Cambridge Startup Jounce Lands $2.5 Billion Deal With Biotech's Best Friend Celgene

Cambridge Startup Jounce Lands $2.5 Billion Deal With Biotech's Best Friend Celgene July 19, 2016
By Mark Terry, Breaking News Staff

Jounce Therapeutics, a private biotech company headquartered in Cambridge, Massachusetts, inked a licensing and development deal with Celgene Corporation that could hit $2.5 billion.

As part of the deal, Celgene gets an option on Jounce’s lead product candidate, JTX-2011, a monoclonal antibody that binds to and activates the Inducible T-cell CO-Stimulator (ICOS). This protein is found on the surface of specific T-cells and seems to cause a cancer-specific immune response. The deal also includes up to four early-stage programs that Celgene will select from a defined pool of B-cell, T-regulatory cell and tumor-associated macrophage targets. There is also an option to share a checkpoint immuno-oncology program.

If it makes it that far, Jounce will head global development and commercialization of JTX-2011 in the U.S., as well as another collaboration program.

Celgene will pay Jounce an upfront payment of $225 million and $36 million equity investment. Jounce is eligible for various regulatory, development, and net sales milestone payments, and tiered royalties on sales outside the U.S. Those various milestone payments could hit $2.3 billion.

“Celgene is the ideal partner to collaborate with Jounce to bring potentially transformational treatments to patients with cancer,” said Richard Murray, Jounce’s chief executive officer, in a statement. “This partnership is of significant strategic value for Jounce. With Celgene as our partner, we can broaden our platform, advance our discovery programs and execute comprehensive clinical strategies, all in the context of our approach to bring the right immunotherapies to the right patient populations.”

This deal is yet another of many by Celgene, that also has oncology drug collaborations with Agios , Juno Therapeutics , Bluebird Bio and Epizyme , and others.

Jounce was founded in 2013 and to date has raised about $103 million in two rounds of investments from nine investors, including Third Rock Ventures, the founding investors. Series B investors include Casdin Capital, Cormorant Asset Management, Foresite Capital, Nextech Invest, Omega Funds, Pharmstandard, Redmile Group, and Wellington Management.

Richard Murray joined the company two years ago from Merck & Co. , where he participated in the development and approval of Keytruda. He told TheStreet that the company is “keeping its options open” concerning an initial public offering.

“The approach is not to repurpose immunology drugs into oncology,” said Murray to Reuters, “but rather to understand human tumors and the immune system cells within these tumors. Our goal is to bring the right immunotherapy to the right patient population. We view it as immunotherapy 2.0.”

It’s a bit of a gamble on the part of Celgene, in that all of Jounce’s products, including JTX-2011, are very early stage. The company expects to move JTX-2011 into the clinic by the end of this year.

“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, Celgene’s chief scientific officer, in a statement. “This collaboration allows both companies to leverage broad capabilities in immuno-oncology to bring forward a new generation of product candidates for cancer patients.”

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