GlaxoSmithKline got its first taste of synthetically lethal cancer therapies via an acquisition. Now it’s trying for a bigger bite of this emerging drug class through a research alliance with Ideaya Biosciences that spans three of the biotech’s programs, all slated to reach clinical trials in the next three years.
According to deal terms announced Tuesday, GSK (NYSE: GSK) has agreed to pay Ideaya (NASDAQ: IDYA) $100 million in cash up front. The pharmaceutical giant is also making a $20 million equity investment in its new partner. Depending on the progress of the programs covered under the agreement, South San Francisco-based Ideaya could receive up to $3 billion in milestone payments, plus royalties from sales of commercialized products.
Speaking on a Tuesday morning investor conference call, Ideaya CEO Yujiro Hata said the deal validated his company’s approach to synthetic lethality. He also revealed that the alliance could see the new partners work together in yet another hot, emerging area of cancer drug research—targeted protein degradation.
After the news was announced, shares of Ideaya opened at $14.56 per share, up more than 62 percent from Monday’s closing price. Shares closed Tuesday at $12.84 apiece.
The concept of synthetic lethality involves exploiting a genetic vulnerability of tumor cells that leads to cell death. That vulnerability can only be triggered by simultaneously hitting both genes of a gene pair. The first synthetically lethal cancer therapies to win regulatory approval are a group of drugs called PARP inhibitors that work by interfering with a DNA repair enzyme called PARP. One of these drugs, niraparib (Zejula), joined GSK’s portfolio with the pharma giant’s $5.1 billion buyout of Tesaro. Sales of the drug in 2019, approved for ovarian cancer patients who have BRCA gene mutations, accounted for £229 million (about $288 million) in revenue since the acquisition closed early last year.
The deal with Ideaya gives GSK the option of picking up three synthetically lethal drug programs in development to address three different genetic targets: MAT2A, DNA polymerase theta (pol theta), and Werner syndrome helicase. The MAT2A program is Ideaya’s most advanced in synthetic lethality, and the company says this genetic target has the potential to address about 15 percent of solid tumors. Ideaya has selected a lead compound, called IDE397, and it anticipates submitting paperwork seeking FDA permission to begin evaluating it in clinical trials in the fourth quarter of this year, according to an investor presentation.
Ideaya trails Agios Pharmaceuticals (NASDAQ: AGIO), a Cambridge, MA-based biotech that has a MAT2A inhibitor, AG-270, in Phase 1 testing. But in a comparison of preclinical data, Ideaya says in its investor presentation that its drug was better at stopping cancer at a fraction of the Agios dose. That suggests the Ideaya drug could be more effective while offering a safer side effect profile.
Under the terms of the deal with GSK, Ideaya is responsible for advancing the MAT2A program through early clinical development. If GSK exercises its option to pick up that program, Ideaya will be responsible for 20 percent of development expenses. But if the research leads to a commercialized drug, Ideaya will share in half of the US profits, plus royalties on sales of the product outside of the US.
For the pol theta and Werner helicase programs, GSK and Ideaya will collaborate on the preclinical work. GSK will take the lead on clinical development, shouldering all of the clinical trial expenses for the pol theta program. If GSK is able to commercialize a pol theta drug, Ideaya stands to earn regulatory and commercial milestones, plus royalties from sales.
For clinical development of the Werner helicase compound, GSK will cover 80 percent of the costs while Ideaya will be responsible for 20 percent. But as with the MAT2A program, the deal terms give Ideaya the right to half of the profits from US sales, plus royalties from sales from around the world.
Hata said that Ideaya’s drugs could complement two GSK drugs. The MAT2A candidate would work with GSK3368715, which is currently in Phase 1 testing. The Ideaya pol theta program offers potential synergies with GSK’s commercialized PARP inhibitor niraparib.
Ideaya could gain additional milestone payments tied to the company’s work on targeted protein degradation, an approach to treating cancer by harnessing the cellular machinery for disposing of unwanted or damaged proteins as a means of getting rid of cancer-causing proteins. This area of cancer drug research has seen a lot of investment activity recently. Nurix Therapeutics and Kymera Therapeutics are among the companies that raised cash this year to advance their respective protein degradation research programs into clinical testing. On Tuesday, Watertown, MA-based C4 Therapeutics became the latest protein degrader to raise cash with the close of a $170 million Series B round of financing.
GSK already has a partnership with Kymera. But the Cambridge biotech’s CEO, Nello Mainolfi, told Xconomy in March that the deal is not a drug development partnership; the pharma giant is using Kymera’s technology to screen for small molecule candidates.
Hata did not go into detail about Ideaya’s protein degradation research, saying that Tuesday is the first time that the company has disclosed those drug discovery capabilities and programs. The investor presentation says Ideaya has protein degraders “advancing for selected targets” without providing additional information. But Hata added that if the research yields successful protein degradation drugs under the partnership with GSK, Ideaya could earn as much as $960 million in additional milestone payments.