Celldex, Bristol-Myers Cut Deal on Immuno-Oncology Combo Trial

Celldex, Bristol-Myers cut deal on immuno-oncology combo trial.

May 14, 2014 at 12:05PM

Big pharmaceutical companies everywhere are playing the mix and match game to come up with the best possible combination of immunotherapy drugs to treat cancer. Hampton, NJ-based Celldex Therapeutics (NASDAQ:CLDX) has become the latest beneficiary of that strategy through a deal today with Bristol-Myers Squibb (NYSE:BMY).

Celldex and Bristol-Myers said today that the two companies will work together to run a clinical trial combining two cancer immunotherapy "checkpoint" inhibitors: Celldex's varlilumab—an antibody that targets the molecular target CD27, helping T cells better recognize tumors—and Bristol-Myers' nivolumab, a so-called PD-1 inhibitor. The two will begin running a Phase 1/2 study in the fourth quarter of 2014 that could examine the combination's effect on multiple cancer types such as lung, ovarian, colorectal, head and neck, and melanoma.

Under the agreement, Celldex and Bristol-Myers will share the cost of the study. Celldex will be precluded from pairing its drug with any other PD-1 inhibitors, while Bristol-Myers will get a time-limited first right to cut a deal with Celldex should the company decide to license out its drug altogether (Celldex owns full rights to varlilumab). Celldex CEO Anthony Marucci says that once the study wraps up, should Celldex decide it wants to license out varlilumab, Bristol-Myers will have an exclusive 30-day window to do a deal before the company can shop the drug to others.

"We could always tell them we don't want to license it out and then they have the ability to go do another trial if they want to, or we have the ability to do another trial if they don't want to move forward," Marucci says. "There's a lot of flexibility, and it gets us to the point where we can negotiate in real time, with data, as opposed to anticipating what that data would be and possibly doing a deal that's not as [good] as we would like."

In the meantime, Celldex is free to potentially pair up varlilumab with, say, a PD-L1 inhibitor or some other type of cancer immunotherapy drug in a different study, he says

Bristol-Myers is paying Celldex $5 million up front. Incidentally, Bristol-Myers would have been entitled to future milestone payments and royalties on Celldex's program, because of an old deal Celldex had in place with Medarex—the company Bristol-Myers bought in 2009, and the one Celldex was spun out of a few years earlier. But those potential milestone payouts have been waived—and the royalty rates reduced—as part of the transaction.

"As we spun out of [Medarex] we got access to their technology at a discounted rate," Marucci says. "But [that deal] doesn't give them any clawbacks into the molecule. All it gave them was...milestones and some low to mid single digit royalties."

The Medarex buyout gave Bristol-Myers, meanwhile, its present-day cancer immunotherapy franchise, headed by ipilimumab (Yervoy)—which releases a brake on the immune system to help the body better fight tumors—and what's now known as nivolumab.

Nivolumab is a member of a class of PD-1 inhibitors that help remove a cloaking device tumors use to hide from the immune system, and it has become a key asset for Bristol-Myers. Up until recently, Bristol-Myers, on the back of nivolumab, was thought to have the lead in the big cancer immunotherapy race with industry giants like Merck and Roche Genentech—until Merck just last week filed an application for approval of its own PD-1 inhibitor, MK-3475.

Pharmaceutical companies have been rushing to combine checkpoint inhibitors with other therapies to boost their overall abilities. This has led to an industrywide scramble to amass as many immno-oncology assets as possible, or put together combination trials with other companies' drugs. Recently, for instance, Bristol-Myers cut a deal with Five Prime Therapeutics to develop more checkpoint inhibitors. The Celldex transaction gives Bristol-Myers another proverbial shot on goal. And just this morning, AstraZeneca announced a similar-type deal with Incyte.

The two companies said today that preclinical data suggest combining the two mechanisms of their respective drugs might boost their anti-tumor immune response. Celldex indicated that it is looking to combine varlilumab with other drugs through other collaborations as well.

"Celldex believes the future of immunotherapy lies in combination regimens that further unlock the power of the immune system to deliver the greatest benefit to the largest population of patients possible," said Marucci, in a statement. "Based on our clinical data and preclinical models for both programs, we think the combination of varlilumab and nivolumab could play an important role in maximizing the body's immune response to cancer."

Celldex shares were up about 24 percent, to $15.34 apiece, in early trading Wednesday.

Will this stock be your next multi-bagger?
Give me five minutes and I'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks 1 stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

This article originally appeared on Xconomy, along with:

Ben Fidler has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers