Celgene, Epizyme Amend Cancer Drug PactBy
Epizyme, Inc., a clinical-stage biopharmaceutical company on developing epigenetic cancer therapies, has amended and restated its agreement with Celgene, to extend the research collaboration between the two companies for at least three additional years. Under the collaboration, Celgene will have the option to license histone methyltransferase (HMT) inhibitors being developed by Epizyme against three predefined targets.
Under the revised agreement, Epizyme will receive a $10 million extension fee from Celgene in return for an option to individually license global rights for two of the targets and ex-US rights for the third target. Celgene may exercise its option with respect to each of the targets at the time of the investigational new drug application (IND) filing for an additional prespecified license payment. Epizyme will be responsible for leading and funding development for each target candidate through Phase I clinical trials. Following the completion of Phase I, if Celgene chooses to continue its license for a specific target, it may do so by making an additional pre-specified payment. Epizyme may earn total potential milestones of up to $610 million on the three targets, including up to $75 million in development milestones and license fees, $365 million in regulatory milestones, and $170 million in sales milestones. Epizyme also may earn a royalty of up to a low double-digit percentage on worldwide net sales for two of the product candidates, and on ex-US net sales for the third product candidate. Epizyme will retain global rights to the remainder of its pipeline, as Celgene’s option to license ex-US rights for any other preclinical programs will terminate. In addition, Celgene will retain its ex-US license to, and the companies will continue their ongoing clinical collaboration on pinometostat, an HMT inhibitor targeting DOT1L. Pinometostat is in Phase I development for treating patients with acute leukemia with alterations in the MLL gene (MLL-r).
The agreement is based on specific development milestones, including the timing of IND filings and completion of Phase 1 studies, but will extend for a minimum of three years. In addition, Celgene will no longer have the right of first negotiation on a business combination with Epizyme.
In addition to announcing its revised agreement with Celgene, Epizyme projects that based on its current operating plans, its cash and cash equivalents will be sufficient to fund operations through at least the end of the second quarter of 2017, prior to including any potential option exercise fees or future milestone payments. This new cash outlook reflects a reallocation of resources, implementation of cost savings initiatives, the additional capital provided from the Celgene extension fee payment and the partial exercise of the overallotment option in April from the company’s March public financing.
Epizyme’s lead drug candidates are tazemetostat, a small-molecule inhibitor of EZH2, for treating non-Hodgkin lymphoma and INI1-deficient solid tumors. Tazemetostat is the second HMT inhibitor to enter human clinical development following Epizyme’s DOT1L inhibitor, pinometostat, a small molecule. Pinometostat was granted orphan drug designation for treating acute lymphoblastic leukemia and acute myeloid leukemia by the US Food and Drug Administration and the European Commission. Epizyme retains all US rights to pinometostat and has granted Celgene an exclusive license to pinometostat outside of the US.