Breathing new life into failed biopharma assets is now a firmly established trend, and its latest example is the setting up of Checkmate Pharmaceuticals with $20m of venture capital to work on an immune system stimulant belonging to the depressed Swiss company Cytos.
Several of Checkmate’s senior executives had been involved with Cytos, so they should at least be familiar with the asset, CYT003. Moreover, there is scientific logic behind repositioning CYT003 from asthma to oncology, so Checkmate’s founding need not necessarily be just a symptom of the biotech bull market.
Also relevant is that Cytos was brought to the brink of insolvency not only by the failure of CYT003, but mainly by a SFr22m ($22m) convertible bond that it could not repay (Cytos bows out as asthma drug bombs, April 14, 2014). As such Checkmate basically represents a second shot on goal without the distractions of a messy balance sheet.
The group’s chief executive is Art Krieg, a former Cytos director more recently famous as being the defenestrated chief scientific officer of Sarepta Therapeutics.
He was also a co-founder of Coley Pharmaceuticals, a business bought by Pfizer, and other ex-Coley execs include Checkmate’s chief financial officer and general counsel. Meanwhile, heading up drug development is Frank Hennecke, who had been with Cytos since 1998.
Immune system induction
CYT003 is an oligonucleotide that targets the toll-like receptor-9 pathway, and its postulated role in asthma was related to detection of microbial DNA and induction of immune response.
It is the last point that is relevant in cancer: a major part of novel immuno-oncology approaches involves the stimulation or priming of the immune system to make the tumour microenvironment more immunogenic and express ligands for antibodies to latch onto.
Indeed, Checkmate cites the possibility of using the acquired Cytos technology to enhance the efficacy of checkpoint inhibitors like the anti-PD-1 and anti-PD-L1 MAbs.
As such Checkmate's idea seems more closely aligned with that of the Sosei unit Heptares, which last week used a very early scientific concept to position a CNS project, HTL-1071, in oncology by way of a licensing deal with AstraZeneca. And CYT003 might have failed in asthma, but it does come with some 700 patients’ worth of safety data.
Moreover, it does not appear to have cost Checkmate anything – yet. Cytos said the deal comprised up to $90m in development milestones plus royalties, but it is not clear why it has let it go. After all the Swiss group has itself completed a refinancing in a punishing debt for equity deal that diluted shareholders by 72% but did unshackle the company from its convertible bond.
It is interesting that the two most recent resuscitations of failed assets have both targeted oncology. Earlier the hot theme was Alzheimer’s disease, with vTv Therapeutics, Axovant and Alzheon breathing new life – on far shakier grounds – into projects dumped by Pfizer, GlaxoSmithKline and Bellus Health respectively.
Now that Checkmate has put its cards on the table and raised the necessary cash its immediate strategy is clear. That of Cytos should follow shortly.