Right after reporting a major Phase 3 LAG-3 miss that has rattled analysts, Regeneron Pharmaceuticals revealed a back-loaded partnership with Parabilis Medicines aimed at adding a new drug class to its early-stage pipeline.
Regeneron is committing $75 million to Parabilis Medicines’ next financing round and offering the peptide-focused biotech up to $2.3 billion in hopes of creating an entirely new drug class.
The research collaboration is designed to combine Regeneron’s antibody-drug conjugate (ADC) capabilities with Parabilis’ peptide platform, dubbed Helicon, according to a Monday release. With five initial targets, the partners plan on creating a novel class of therapeutics called antibody-helicon conjugates (AHCs) in an effort to tackle historically “undruggable” targets.
Parabilis’ helicons are peptides engineered to penetrate cells and bind to protein targets that traditional small molecule drugs can’t reach. Together, the two companies plan to evaluate helicons both as a monotherapy and as part of AHCs.
The AHCs are modeled after traditional ADCs, which use antibodies to selectively deliver drug payloads into cells and trigger cell death from within. The imagined drug class will use the same delivery idea: pairing antibody-targeted cell access with Helicon payloads to act on specific proteins inside cells.
The pair will work together on discovery activities, with Regeneron then expected to take on further development, manufacturing and commercialization responsibilities. Regeneron has already committed $125 million to Parabilis, consisting of $50 million cash and a $75 million pledge to support the biotech’s next fundraise depending on certain undisclosed conditions. Earlier this year, the biotech—formerly called FogPharma—secured a hefty $305 million series F to fuel its lead asset zolucatetide, an investigational peptide therapy being tested for rare and solid tumors.
According to the terms of the Regeneron deal, the biotech could also garner up to $2.2 billion in milestone, plus tiered royalties. The New York pharma also has the option to tack on more targets for additional option payments.
“This collaboration reflects Regeneron’s approach of advancing cutting-edge and diversified science to produce a robust portfolio of innovative medicines for patients in need,” Regeneron Chief Scientific Officer George Yancopoulos said in a statement. He added that the partnership has the potential to address previously undruggable targets across multiple therapeutic areas.
The partnership news follows a rough late-stage readout for Regeneron that has shaken investors’ confidence in the company’s abilities.
Regeneron’s investigational LAG-3 inhibitor, when used with the company’s PD-1 blocker Libtayo, failed to significantly benefit survival as a first-line treatment option in unresectable or metastatic melanoma, as compared with Merck’s Keytruda.
“This was to be the defining catalyst of 1H26,” analysts at BMO Capital Markets told investors in a Sunday note, adding that “even more pressure has been placed on the company’s pipeline” because of the miss. Truist Securities agreed, deeming the readout a “mishap” and writing that “investors may need to wait longer for a strong pipeline driver to emerge.”
Regeneron’s stock plunged more than 10% when the markets opened on Monday.
