Eli Lilly and Kumquat Seek Enhanced Tumor-Specific Immune Response in $2B+ Deal
Loxo Oncology, a division of Eli Lilly, and Kumquat Biosciences are teaming up in a deal valued at more than $2 billion to discover and develop novel small molecules designed to stimulate tumor-specific immune responses in cancer patients.
This morning, the two companies announced their exclusive collaboration that will harness the capabilities of Kumquat’s small molecule immuno-oncology (IO) platform in order to discover novel clinical candidates. Once through the discovery phase, Eli Lilly will have the option to select the assets that it wants to explore in preclinical and clinical development.
In the announcement, the two companies did not specify any particular cancer indications they hoped to go after, nor did they outline any specific pathway approach.
Kumquat launched in 2019 and has been backed by a strong investor pool that includes OrbiMed and Lilly Ventures Asia. The company has raised more than $100 million.
Under terms of the deal, Eli Lilly will pay San Diego-based Kumquat $70 million upfront consisting of both cash and equity. As the companies move through the discovery and development phase toward clinical testing and potential commercialization, Kumquat could ultimately earn more than $2 billion in milestone payments. The small company will also be eligible for royalties based on potential sales.
Jacob Van Naarden, chief executive officer of Lilly’s Loxo Oncology, noted the use of small molecule inhibitors aimed at specific tumor antigens in complex with the immune machinery. Van Naarden also explained the potential development of these small molecule inhibitors would present researchers with a “unique opportunity to stimulate an enhanced tumor-specific immune response.” Van Naarden expressed his excitement about working with Kumquat to identify drug candidates that can provide a new treatment option for patients.
“Kumquat is developing a novel small molecule IO platform and this collaboration with Lilly is expected to greatly expedite the development of this platform and maximize its full potential. We look forward to working with Lilly to identify the next generation IO drugs that will benefit a broad population of patients,” Kumquat Biosciences CEO Yi Liu said in a statement.
Regarding the development and potential commercialization of the small molecules, Kumquat has retained development and commercialization rights in China for each drug candidate that Lilly selects. Lilly will have the option to co-commercialize in China. Kumquat will have the opportunity to co-develop and co-commercialize a certain number of the drug candidates selected by Lilly in the United States.