Squelgene does a lopsided swap with Jounce

Celgene opts out of Jounce’s Icos agonist ahead of its merger with Bristol-Myers Squibb.

Deals

Icos ligands have failed to set the oncology world on fire, so news that Celgene was returning the rights to vopratelimab to its originator, Jounce Therapeutics, might not initially seem too surprising. What is surprising is the 14% jump in Jounce’s stock today.

True, Celgene has taken rights to another Jounce asset, the anti-leukocyte immunoglobulin-like receptor B2 antibody JTX-8064. But the $50m up-front payment for this asset is only worth around half of Jounce’s yearly cash burn. And Jounce was founded around the Icos mechanism, so Celgene’s rejection is worrying. 

The cost of Icos

The companies’ collaboration dates back three years, when Celgene paid $225m up front and made a $36m equity investment in Jounce for rights to the Icos agonist vopratelimab, the PD-1 inhibitor JTX-4014 and up to three undisclosed discovery-stage projects. 

Jounce's pipeline
Product Mechanism Deal status Trials
Vopratelimab (JTX-2011) Icos agonist  Celgene took option in July 2016; Jounce has now regained rights Emerge - phase II in NSCLC and urothelial cancer
      Iconic - phase I/II in solid tumours
JTX-4014 PD-1 inhibitor  Celgene took option in July 2016; Jounce has now regained rights Phase I in solid tumours
JTX-8064 Anti-leukocyte immunoglobulin-like receptor B2 (LILRB2) MAb  Newly licensed to Celgene Preclinical
Source: company communications.

It will not have escaped investors’ notice that the two projects Celgene has handed back share pharmacologies with compounds in Bristol-Myers Squibb’s arsenal. Presumably once the megamerger is complete Bristol-Myers Squelgene will be able to rely on its Icos agonist BMS-986226, which is in a phase I/II trial in solid tumours. 

However, presumably the failure of this mechanism to add much on top of checkpoint inhibition also played a part in Celgene’s decision to drop vopratelimab (Asco preview – No Icos bounce for Jounce, May 17, 2018).

Indeed the enthusiasm for Icos-targeted assets on the part of another big pharma, Glaxosmithkline, has been the source of some puzzlement to industry watchers. The UK company talked up its Icos agonist GSK3359609 earlier this year, and today said that positive phase II data in head and neck cancer would be presented at the upcoming Esmo meeting. 

Glaxo is claiming a differentiated mechanism of action for its project, highlighting its ability to activate the Icos receptor with no or minimal T-cell depletion

Unproven

When it comes to checkpoint inhibition itself, of course, Bristol has Opdivo. Compared with a drug forecast to do nearly $10bn of business in 2024, according to EvaluatePharma’s consensus data, JTX-4014 brings little to Bristol’s table. 

JTX-8064 has attracted Celgene’s interest, of course, but this is not so exciting. With $50m up front and the promise of up to $480m in milestones the deal is hardly in the same league as the 2016 collaboration, and the return of rights to the other projects reduces Jounce’s overall validation. 

Analysts expect the $50m up-front fee, plus $173m of first-quarter cash, to last Jounce into the second half of 2021. By that point, if Bristol gets its skates on, there might be some clinical data on JTX-8064 – Jounce had said it would start phase I trials this year, but this will now be Celgene’s decision. 

As an approach to treating cancer, hitting the LILRB2 receptor on macrophages, which is intended to reprogramme the cells to target and destroy tumours, remains unproven. Preclinical data presented at this year’s AACR meeting suggested that JTX-806 blocked ligand binding to LILRB2 and induced an immune activating state in macrophages. But no human has yet received the project, and it is, according to EvaluatePharma, the only such asset in development.

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