Pre-IPO Sting gives Novartis a stake in Aduro
Just when it looked like Novartis might be taking its foot off the immuno-oncology pedal the group has staked $225m on Aduro Biotech – shortly before that early and largely unproven private US company completes an $86m Nasdaq flotation.
There are similarities here with AstraZeneca’s big bet on Moderna Therapeutics’ RNA technology, both collaborations seeing a pharma company put its faith in a scientific approach that has yet to enter the clinic. In Novartis’s case the focus is on Sting, a recently discovered protein complex thought to play a key role in innate immunity.
Aduro seems to be the only commercial entity with a focus on the Sting (stimulator of interferon genes) pathway. It is interesting that, at least for now, this is what Novartis is betting on, as Aduro is also working on clinical-stage cancer vaccine assets and an anti-PD-1 research project.
That said, the Swiss group now has a stake in Aduro’s entire pipeline, given that today’s deal has seen it buy a $25m equity interest valuing the privately held Aduro at an impressive $926m. Earlier this month Aduro had filed to raise up to $86m in an IPO that has yet to be priced.
New research group
Aduro, Novartis says, will now form the basis of its new research group focusing on cancer immunotherapies that include the phase II CD19-directed CAR-T project CTL019, and checkpoint inhibitors targeting PD-1, Lag3 and Tim3, due to enter the clinic in mid-2015.
This should remind investors in other novel immuno-oncology players like Kite Pharma and Juno Therapeutics that Novartis is still a major force. There had been some surprise when the Swiss firm barely mentioned the progress of its CAR-T assets at its full-year presentation, though this could have been a sign of caution at a time of overheated market expectations.
In addition to the equity investment Novartis has handed over $200m up front to Aduro, and stands to pay it a further $500m based on future development milestones.
The Sting protein prompts expression of cytokines and downstream transcription factors that work to prime and stimulate the innate immune system, which normally protects the body against pathogens like bacteria. Last year a paper in Immunity postulated that Sting played a role in detecting and destroying tumour cells.
Aduro targets the Sting receptor via small-molecule cyclic dinucleotides (CDNs). Its lead CDN project is ADU-S100, whose most advanced data so far have been in preclinical models, showing potent anti-tumour activity; under the Novartis collaboration a phase I study is planned.
Is that all?
For those wondering why Novartis has not, for now, expressed an interest in Aduro’s clinical projects, or indeed in buying the company outright, there might be several answers.
The most obvious is that Aduro’s private backers might see a clear logic, while the market is hot, in flying solo to generate more value. Then there is the fact that Novartis already has a strong presence in immuno-oncology, and that two early Aduro projects, ADU-741 and ADU-214, are partnered with Johnson & Johnson, complicating a potential takeout.
Aduro’s most advanced in-house focus, meanwhile, is on what it calls LADD, a technology in which two gene deletions engineer the bacterium Listeria monocytogenes into a therapeutic agent. The lead LADD asset is CRS-207, in phase II for pancreatic cancer, while ADU-623 is in phase I studies for high-grade glioma.
Before Novartis stepped in, IPO investors were being asked to make a huge leap of faith in betting on these highly intractable tumour types – no mean feat at a time of rising fears that air is escaping the biotech bubble. Novartis just gave Aduro’s flotation a major shot in the arm.