Takeda Pays Turnstone $120M to Start Alliance on Viral Cancer Therapies

Xconomy New York — 

[Updated 12/20/19, 2:51 p.m. See below.] Turnstone Biologics has yet to test its engineered viruses in cancer patients but Takeda Pharmaceutical sees enough promise in the technology to pay $120 million up front to start a partnership developing the biotech’s lead therapeutic candidate.

The Takeda (NYSE: TAK) payment is a combination of cash, near-term milestones, and equity in its new partner, though the breakdown was not specified. The Japanese pharmaceutical giant receives an exclusive worldwide license to co-develop Turnstone’s lead compound, RIVAL-01. The companies will share equally in the therapy’s development costs and if it’s approved, the profits. They’ll also work together to develop more cancer treatments using the same virus technology. [Paragraph updated to clarify the Takeda payment.]

Turnstone, which has operations in New York and Ottawa, Canada, could earn up to $900 million more in milestone payments tied to the progress of those programs, plus royalties from sales if those therapies reach the market.

Turnstone uses oncolytic viruses for a multi-pronged attack on cancer cells, says President & CEO Sammy Farah (pictured above). These viruses are engineered to selectively target and kill cancer cells. They’re also encoded with three therapies intended to stimulate the immune system and make tumors recognizable to immune cells. Farah adds that as the virus replicates in cancer cells, those cells become production factories for the encoded therapeutics.

“It’s a very powerful way of getting at the cancer while limiting the toxicity of these therapeutics on their own,” he says.

The backbone of RIVAL-01 is the vaccinia virus, a virus that has been used extensively in vaccines. In addition to a long safety record, the virus can also be engineered to grow exclusively in tumor cells, keeping the effects of the therapy focused on the tumors and leaving healthy cells alone, says Mike Burgess, Turnstone’s vice president of research and development.

The selectivity of Turnstone’s technology is key to producing an intravenously administered therapy that can be delivered systemically throughout the body, as opposed to some cancer therapies that are injected directly into the tumor, Farah says. Though Farah acknowledged that the technology could have applications in other diseases, he says the company’s focus is cancer. Initially, Turnstone will plan to develop treatments for solid tumors but Burgess says the company will also explore potential treatments for lymphomas.

Turnstone isn’t the only company developing oncolytic viruses. Earlier this year, Oncorus raised nearly $80 million to advance its lead therapeutic candidate to clinical trials. The Cambridge, MA-based biotech’s technology uses a version of the herpes virus. Last year, Merck (NYSE: MRK) plunked down $394 million to acquire Viralytics. The Australian company’s oncolytic viruses are being tested for potential use in combination with Merck’s cancer immunotherapy pembrolizumab (Keytruda).

So far, Turnstone has only tested its technology in animals. Farah declined to offer a timeline for starting clinical trials, saying only that “we want to get these [therapies] evaluated in humans as rapidly as possible.” He added that the partnership with Takeda helps the company move toward clinical testing.

Takeda has the right to license therapeutic candidates that emerge from the partnership with Turnstone. But the agreement also allows each company to work on programs independently. Farah says Turnstone’s freedom to develop therapies separately from Takeda was an important factor in choosing to strike a deal with the Japanese pharmaceutical giant. Turnstone already has an earlier partnership with AbbVie (NYSE: ABBV), a 2017 deal aiming to develop viral immunotherapies for cancer-based on the Maraba virus.

Turnstone was founded four years ago in Ottawa based on the research of John Bell from the Ottawa Hospital Research Institute, Brian Lichty from McMaster University, and David Stojdl from the University of Ottawa. The company has raised more than $50 million from investors that include Versant Ventures, Orbimed Healthcare Fund Management, Fight Against Cancer Innovation Trust, and F-Prime.

Photo by Turnstone Biologics