Incyte in $480-Million Arginase Inhibitor PactBy
Incyte, a Wilmington, Delaware-based biopharmaceutical company, has formed a collaboration and license agreement with Calithera Biosciences, a South San Franciso-headquartered clinical-stage pharmaceutical company focused on small-molecule drugs for cancer, to research, develop, and commercialize Calithera’s small-molecule arginase inhibitor in hematology and oncology in a deal worth more than $483 million.
Under the collaboration and license agreement, Calithera will receive an up-front payment of $45 million from Incyte. In addition, Incyte will make an equity investment in Calithera of $8 million through the purchase of shares at a price of $4.65 per share. Calithera will also be eligible to receive more than $430 million in potential development, regulatory, and commercialization milestones from Incyte.
Incyte will receive worldwide rights to develop and commercialize Calithera’s drug candidate, CB-1158, in hematology and oncology and Calithera will retain certain rights to research, develop, and commercialize certain other arginase inhibitors in certain orphan indications. Incyte and Calithera will jointly conduct and co-fund development of CB-1158, with Incyte leading global development activities. Incyte will fund 70% of global development and Calithera will be responsible for the remaining 30%.
In the event of regulatory approvals and commercialization of CB-1158, Incyte and Calithera will share in any future US profits and losses, receiving 60% and 40%, respectively. Under the agreement, Calithera will have the right to co-detail CB-1158 in the US and will also be eligible to receive from Incyte tiered royalties based on future ex-US sales, with rates ranging from low-to-mid double-digits.
The agreement also provides that Calithera may choose to opt out of its co-funding obligations. In this scenario, Calithera would no longer be eligible to receive future US profits and losses but would be eligible to receive up to $750 million in potential development, regulatory, and commercialization milestones from Incyte and, if the product is approved and commercialized, will also be eligible to receive reimbursement based on previous development expenditures incurred by Calithera and tiered royalty payments on future global sales of CB-1158. Royalty rates range from low-to-mid double-digits. The transaction is expected to close in the first quarter of 2017, subject to customary closing conditions.
CB-1158 is currently being studied in a monotherapy dose escalation trial and additional studies are expected to evaluate CB-1158 in combination with immuno-oncology agents, including anti-programmed death-1 therapy.
Arginase is an enzyme produced by immunosuppressive myeloid cells, which prevents T-cell and natural killer cell activation in tumors, according to Incyte. Inhibition of arginase activity reverses this immunosuppressive block and restores T-cell function, according to the company.