BMS Agrees to Acquire Flexus Biosciences for $1.25 Bn; Signs Immunotherapy Pact with Rigel

Bristol-Myers Squibb has signed a definitive agreement under which Bristol-Myers Squibb will acquire all of the outstanding capital stock of Flexus Biosciences, a privately held biotechnology company focused on the discovery and development of anti-cancer therapeutics. The transaction has a potential total consideration of $1.25 billion, including $800 million upfront and development milestones that, upon achievement, could total up to $450 million. The transaction has been approved by the boards of directors of both companies and by the stockholders of Flexus.

The acquisition will give Bristol-Myers Squibb full rights to F001287, Flexus' lead preclinical small molecule IDO1-inhibitor targeted for an investigational new drug filing in the second half of 2015. In addition, Bristol-Myers Squibb will acquire Flexus' IDO/TDO discovery program, which includes its IDO-selective, IDO/TDO dual and TDO-selective compound libraries. A newly formed entity established by the current shareholders of Flexus will retain, from and after the closing, all non-IDO/TDO assets of Flexus including those related to Flexus' Phase 1 FLT3 and CDK4/6 inhibitor, its earlier stage small-molecule Treg cancer immunotherapy programs, and its current personnel and facilities.

IDO and TDO are enzymes expressed by many tumor cells and cells in the surrounding microenvironment that suppress T-cell function by producing a potent immunosuppressive factor, kynurenine, thus inhibiting the immune system from identifying and destroying certain types of tumors. IDO/TDO inhibitors reduce kynurenine production enabling the immune system to attack tumors more effectively. Given the immuno-modulatory effects of IDO/TDO inhibitors, strong scientific rationale supports exploring combination regimens with immunotherapies where synergistic activity may enhance long-term survival benefits for patients.

Bristol-Myers Squibb and Flexus anticipate the transaction will close during the first quarter of 2015. Closing of the transaction is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

Founded in 2013, Flexus is a biotechnology company based in San Carlos, California, and is focused on the discovery, development, and commercialization of small-molecule cancer immunotherapies targeting regulatory T cells. The company is immunology expertise to discover agents for reversal of tumor immunosuppression (ARTIS). This disruptive approach to cancer therapy targets that which is common to all tumors, the host immune system.

Separately, Bristol-Myers Squibb and Rigel Pharmaceuticals have entered into a collaboration agreement for the discovery, development, and commercialization of cancer immunotherapies based on Rigel's ve portfolio of small-molecule TGF beta receptor kinase inhibitors. TGF beta can promote tumor growth, broadly suppress the immune system ,and increase the ability of tumors to spread in the body. The collaboration will focus on developing a new class of therapeutics aimed at increasing the immune system's activity against various cancers either as monotherapy or in combination with immune checkpoint inhibitors, including Bristol-Myers Squibb's Opdivo (nivolumab) and Yervoy (ipilimumab).

Under the terms of the agreement, Bristol-Myers Squibb will obtain exclusive, worldwide rights to develop and commercialize small molecule therapeutics derived from Rigel's TGF beta library, including, but not limited to, those approved to treat cancer. Bristol-Myers Squibb will pay $30 million upfront and Rigel will be eligible to receive development and regulatory milestones that could total more than $309 million for a successful compound approved in multiple indications. Rigel will also be eligible to receive tiered royalties on the net sales of any products from the collaboration.

Within the immune system, TGF beta often plays an immunosuppressive role by potently suppressing effector cell proliferation and function while simultaneously promoting differentiation of certain suppressive T-cells. This master regulator is often present within tumor microenvironments and can significantly dampen anti-tumor host immune responses. Current evidence suggests that TGF beta can arise from many sources, including the cancer itself, surrounding cells and infiltrating macrophages.

Developing a drug that inhibits TGF beta signaling in cancer patients has the potential to counteract an important mechanism used by cancers to escape immuno-surveillance, thereby making this signaling pathway an appealing therapeutic target for immuno-oncology related applications. Rigel has identified a large number of orally bioavailable, potent and selective small molecule inhibitors of TGF beta receptor kinases that have demonstrated in vivo efficacy, in preclinical animal models of cancer, consistent with an immune-mediated mechanism of action.

Source: Bristol-Myers Squibb (Flexus) and Bristol-Myers Squibb (Rigel Pharmaceuticals)

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