CytomX Lands $80M to Kick Off Cancer Drug R&D Pact With Astellas

Xconomy San Francisco — 

CytomX Therapeutics is teaming up with Astellas Pharma in a research and development alliance focused on developing new cancer immunotherapies based on its antibody technology.

Under deal terms announced late Monday, Astellas is paying CytomX (NASDAQ: CTMX) $80 million up front. South San Francisco-based CytomX will conduct and finance the research up to the selection of drug candidates. Astellas will take the lead from there, funding preclinical and clinical research. Depending on the progress of those programs, Tokyo-based Astellas could pay CytomX up to $1.6 billion more, plus royalties from sales of any approved products.

Shares of CytomX opened at $6.79 each on Tuesday, a more than 37 percent jump from Monday’s closing price.

CytomX develops antibody drugs that remain inactive until they reach cancerous tissue, an approach intended to spare healthy tissue from the toxic effects of the therapy. The company’s drugs accomplish this by using a “mask” that blocks the antibody from binding to targets in healthy tissue, CytomX says. Once the antibody encounters cancerous tissue, enzymes that are active only in cancer cells remove the masks.

In addition to offering a targeted approach, CytomX says its technology, called Probody, can extend the “therapeutic window,” which is the dose range in which a drug can be used effectively without causing unacceptable toxic effects. The company says its technology can also address cancer targets that had previously been considered “undruggable.” CytomX’s research has produced two wholly-owned drug candidates now in mid-stage testing. CX-072 is being tested in melanoma and CX-2009 is an experimental treatment for breast cancer.

The partnership with Astellas is focused on developing T cell engaging bispecific antibody drugs, which can hit two targets simultaneously. The companies aim to target CD3, a protein complex that activates T cells, and selected tumor antigens. According to a CytomX securities filing, the initial agreement covers products directed at up to four targets. But Astellas also has an option to expand the pact to six targets. If the alliance produces commercialized drugs, the filing notes that CytomX has the option to co-commercialize certain products in the US. That work would be covered by a separate commercialization agreement that would be hammered out by both companies.

Astellas hasn’t been shy about shelling out cash to gain access to promising technologies. In December, the company agreed to acquire San Francisco-based gene therapy developer Audentes Therapeutics for $3 billion. That deal followed a 2018 deal in which Astellas paid $102.5 million to acquire Universal Cells, a gene-editing biotech based in Seattle.

For CytomX, the partnership with Astellas is its latest such R&D alliance. A collaboration with Bristol Myers Squibb (NYSE: BMY) has advanced to Phase 2 testing in multiple myeloma, and Phase 1 in solid tumors. A program partnered with AbbVie (NYSE: ABBV) is in Phase 1 testing in solid tumors. CytomX’s partnership with Amgen (NASDAQ: AMGN) is still preclinical. Payments from partners accounted for $57.4 million in revenue last year, according to CytomX’s annual report.

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