Gilead Sciences Places $120M Bet on a Jounce Therapeutics Cancer Drug

Xconomy San Francisco — 

Gilead Sciences is opening up its checkbook yet again to add another cancer therapy to its pipeline, this time committing $120 million to Jounce Therapeutics for rights to an antibody drug approaching clinical testing.

The Jounce (NASDAQ: JNCE) drug, JTX-1811, is intended to selectively deplete regulatory T cells—the type of immune cells that suppress the immune response. Cambridge, MA-based Jounce has said that therapies targeting regulatory T cells may help address cancers that don’t respond to currently approved immunotherapies.

According to the deal terms announced Tuesday, Gilead (NASDAQ: GILD) will pay Jounce $85 million up front. The Foster City, CA-based biopharmaceutical company will also make a $35 million equity investment in Jounce at a premium that was not specified. Jounce could earn up to $685 million in milestone payments tied to the progress of the drug. If the drug reaches the market, the agreement requires Gilead to pay Jounce royalties from sales.

Shares of Jounce opened Tuesday at $7.65 apiece, a 58 percent bounce from Monday’s closing price.

Jounce designed JTX-1811 to target CCR8, a receptor found on tumor-infiltrating regulatory T cells. Binding to the receptor triggers a mechanism that’s toxic to those cells, killing them. Depleting regulatory T cells in this manner is hoped to allow for better immune responses in the tumor microenvironment—the blood vessels, immune cells, and signaling molecules in the area surrounding a tumor. Jounce says it is on track to seek FDA permission in the first half of 2021 to begin human testing of its drug.

Jounce has previous experience striking deals with bigger companies. In 2016, it landed $225 million up front from Celgene in an alliance spanning several cancer immunotherapy candidates. Bristol Myers Squibb (NYSE: BMY) inherited that partnership through its acquisition of Celgene last year, but ultimately decided not to keep it. In June, Bristol ended the pact and returned rights to preclinical-stage JTX-8064, the last remaining piece of the alliance with Celgene.

The most advanced wholly owned Jounce drug, vopratelimab, is an antibody designed to bind to inducible T cell co-stimulator, a protein on the surface of T cells found in many solid tumors. The drug is currently in Phase 2 testing in combination with Bristol drug ipilimumab (Yervoy).

Under the deal with Gilead, Jounce will remain responsible for JTX-1811 until the regulator gives the go-ahead for a clinical trial. After that, Gilead will have exclusive rights to develop the drug. The Gilead cancer drug lineup already includes the cell therapies Yescarta, approved by the FDA in 2017, and Tecarta, which received the regulatory nod in July. The company has been striking deals to supplement those therapies. In March, the company agreed to pay $4.9 billion to acquire Forty Seven, a developer of immunotherapies that block the cancer protein CD47. The company continued to be an active dealmaker throughout the summer, landing equity stakes and options to acquire a pair of San Francisco Bay Area cancer immunotherapy developers: Pionyr Immunotherapeutics and Tizona Therapeutics.

In a prepared statement, William Lee, Gilead’s executive vice president of research, said that the Jounce drug complements his company’s other cancer drug candidates, “and has the potential to be first in a new class of therapies as a treatment for people with both solid tumors and hematological malignancies.”

Image: iStock/payphoto


Want more Xconomy content? Subscribe today for free newsletters, event and webinar alerts, whitepapers, podcasts, and more.