Todd Campbell, writing for The Motley Fool, looks at one of Celgene’s collaborations with a smaller company.
Celgene is well known for its external research partnerships and collaborations. They range from A to Z, including Abide Therapeutics and Acceleron Pharma to Zymeworks with stops in between for AstraZeneca, bluebird bio, Bristol-Myers Squibb and many others. Todd Campbell, writing for The Motley Fool, looks at one of its collaborations with a smaller company, Jounce Therapeutics.
The collaboration was announced in July 2016. Jounce focuses on cancer immunotherapies and predictive biomarkers. The deal included options on Jounce’s lead product candidate, JTX-011, which targets ICOS, and up to four early-stage programs. Under that deal, Jounce received an upfront payment of $225 million and a $36 million equity investment from Celgene. There were potential milestones that could total a whopping $2.3 billion, as well as tiered royalties on sales outside the U.S.
JTX-2011 is currently in the Phase II part of a Phase I/II trial. It is being used in combination with Bristol-Myers Squibb’s Opdivo, and is being evaluated in six different solid tumors, including non-small cell lung cancer (NSCLC) that is resistant to PD-1 therapy.
Campbell writes, “Since all of the patients participating in Jounce Therapeutics’ trial have advanced disease and they’re either refractory to PD-1 or express PD-1 at low levels, a positive showing for JTX-011 could suggest it addresses a big unmet need for new solid-tumor treatments. The Food and Drug Administration (FDA) has expressed a willingness to expedite the review of cancer drugs for this tough-to-treat cancer population, so if JTX-011 is safe and effective in Phase II, it could end up on a regulatory fast track.”
The company will release partial data from the trial in the first half of next year, and although it hasn’t specified a date, Campbell expects it will be presented at the American Society of Clinical Oncology (ASCO) meeting held in June 2018.
Jounce released its third-quarter financials on Nov. 13. Its collaboration revenue was $18.1 million for the third quarter, up from $16.9 million in the same period the year before. Its cash as of Sept. 30 is $283.4 million, with research-and-development expenses of $11.1 million for the third quarter. The net loss for the third quarter was $4.1 million, primarily caused by the increase in operating expenses, increased headcount, R&D activities and costs tied to being a public company.
The company’s chief executive officer and president, Richard Murray, said in a statement, “During the third quarter, Jounce continued to progress on the ongoing Phase II portion of the ICONIC study. We are pleased with the ICONIC study enrollment and remain on track to deliver preliminary efficacy data in the first half of 2018, together with updated safety and biomarker data. We also made key appointments to our Board of Directors and leadership team. We continue to emphasize and build our earlier stage research efforts to expand our innovative pipeline and maximize the value of our Translational Science Platform, with the goal of delivering novel immunotherapies to provide long-lasting benefits to cancer patients.”
The question Campbell poses is whether Jounce is worth investing in. He admits it’s probably too early to say definitively. However, he writes, “Celgene’s involvement gives the company a deep-pocketed, highly experience partner, though, and with $283 million on its balance sheet, Jounce Therapeutics says it has the financial flexibility to get itself through the next two years. If the company’s calculations are correct, investors might not have to worry about a dilutive stock offering prior to the release of JTX-011 data next year.”
That makes it, not unlike many small biotech stocks, a high-risk, high-reward bet.
