Genentech, NewLink Genetics Strike $1 Billion+ Cancer Deal

Published: Oct 21, 2014

Genentech, NewLink Genetics Strike $1 Billion+ Cancer Deal

October 20, 2014

By Jessica Wilson, Breaking News Sr. Editor

NewLink Genetics Corp. is having a banner month. The Ames, Iowa-based biopharmaceutical company announced today that it has inked a deal potentially worth $1 billion with Genentech, a member of the Roche Group, for the development of NLG919, NewLink's IDO pathway inhibitor.

NewLink’s share prices were up nearly 26 percent as a result in morning trading today.

News of the Genentech deal comes hot on the heels of the announcement last week that the Canadian government is conducting Phase I trials of NewLink’s Ebola virus vaccine at the Walter Reed Army Institute of Research in Maryland. Canada has signed a licensing agreement with NewLink to sell the vaccine, which is designed to prevent infection in healthy adults. On the day of the Canadian announcement, NewLink share prices jumped nearly 24 percent.

The Genentech/NewLink deal, which will have to pass review clearance under the Hart-Scott-Rodino Antitrust Improvements Act, will focus on the development, manufacture and commercialization of a type of immunotherapy referred to as an IDO pathway inhibitor.

Genentech will pay NewLink $150 million upfront, which NewLink will use for the development of the IDO pathway inhibitor NLG919 in combination with its HyperAcute vaccine platform. If NewLink achieves certain milestones, the company could earn $1 billion over during the life of the deal, as well as double-digit royalties on potential sales of multiple products by Genentech.

“This alliance enables us to accelerate and expand development of NLG919 while we continue to advance our other promising clinical and preclinical development programs,” said Charles Link, chairman and chief executive officer of NewLink, in a press release from the company. “Genentech’s oncology development expertise, commercial leadership and history of successful strategic alliances make it an ideal collaborator to bring the potential benefits of NLG919 to patients.”

IDO pathway inhibitors, such as NLG919, join the stable of immunotherapy treatments that include the 2013 “Drug of the Year” Programmed death-1 receptor (PD-1). These drugs are antibodies designed to ramp up the body’s own immune system and focus its power on targeting cancer cells.

When the IDO pathway receives certain signals, it suppresses T-cell activation that can allow tumors to go undetected. As the company explains it in the press release, “When hijacked by developing cancers in this manner, the IDO pathway may facilitate the survival, growth, invasion and metastasis of malignant cells whose expression of tumor associated antigens (TAAs) might otherwise be recognized and attacked by the immune system.” If a drug can inhibit the IDO pathway, the body can once again recognize and attack cancer cells.

“We are intrigued by the biology of the IDO and TDO compounds and are very interested in the potential to combine them with Genentech's portfolio of novel therapies,” said James Sabry, senior vice president and global head of Genentech Partnering. “We are delighted to have initiated this significant partnership with NewLink. We hope this collaboration will lead to new therapies for people with cancer.”

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