LONDON – Astrazeneca plc is in both giving and receiving mode as it moves to expand its immuno-oncology portfolio, simultaneously announcing a $1.275 billion in-licensing agreement with French biotech Innate Pharma SA and the out-licensing of rights to develop its MEDI4736 anti-PD-L1 antibody in hematological cancers to Celgene Corp. in return for a $450 million up-front payment.

The deal with Innate revolves around IPH2201, a natural killer cell-activating antibody, which is in phase II. The product will be developed both as a monotherapy and in combination with MEDI4736, an anti-PD-L1 immune checkpoint inhibitor being developed by Astrazenca's biologics arm Medimmune.

Marseille, France-based Innate will receive an up-front payment of $250 million, with a further $100 million to come at the start of phase III development of IPH2201. That will be followed by $925 million in regulatory and sales-related milestones. Innate will get royalties on sales, and in addition has the right to co-promote and take 50 percent of the profits on any products that make it to market in Europe.

IPH2201 activates the innate immune system against tumor cells by neutralizing NKG2A, a checkpoint receptor that normally maintains natural killer cells and cytotoxic T cells in a quiescent state, preventing them from exerting an anticancer effect.

In December, the product entered its first phase II trial, in which it is being evaluated as a single agent in the treatment of resectable squamous oral cancers in advance of surgery.

Under the deal, Innate's existing phase II plans to develop IPH2201 as a monotherapy will go ahead as intended, and in addition to testing IPH2201 in combination with MEDI4736, the two companies will co-develop biomarkers. The companies did not disclose in which indications the two antibodies will be developed as a combination therapy.

Herve Brailly, CEO and co-founder of Innate, told BioWorld Today that third-party research in the published literature indicates the targets of IPH2201 and MEDI4736 have different expression patterns. "So there is a large body of evidence supporting the combination, and we have also generated [positive] internal data, that are unpublished," Brailly said.

MEDI4736 entered phase III development as a monotherapy in the treatment of non-small-cell lung cancer in May 2014. The 702-patient Pacific trial is evaluating progression-free survival and overall survival vs. placebo in patients with locally advanced unresectable disease.

Astrazeneca has since started other phase III trials, and MEDI4736 also is in a number of phase II studies. In addition to testing the product as a monotherapy, it is being assessed in combination both with other Astrazeneca drugs and products from partner companies.

Now Celgene is taking on development of MEDI4736 across a range of hematological cancers, including non-Hodgkin's lymphoma, myelodysplastic syndromes and multiple myeloma.

The deal with Astrazeneca comes three weeks after Celgene dropped out of an alliance with Morphosys AG, of Munich, Germany, under which it was developing an anti-CD38 antibody in multiple myeloma.

In addition to the up-front payment to Astrazeneca of $450 million, Celgene will lead the clinical program and be responsible for all R&D costs up to the end of 2016, when it will switch to paying 75 percent of those costs.

While Astrazeneca will do the manufacturing, Summit, N.J.-based Celgene will be responsible for commercialization of MEDI4736 in hematological indications and will receive royalties starting at 70 percent.

Pascal Soriot, CEO of Astrazeneca, noted that of 72 cancer trials the company has in progress, 31 involve immune modulation. "Our strategic collaboration with Celgene will maximize the potential of our immuno-oncology assets in the very important hematology indications," Soriot said.

A TRANSFORMATIVE AGREEMENT

From the perspective of Innate's Brailly, Astrazeneca's broad pipeline in immuno-oncology makes for a perfect partner in a field where Innate has been chipping away since 1999. "Astrazeneca is a leader in the field of oncology and has very strong capabilities in biomarker development. So this is a unique opportunity to move forward and create value with IPH2201 in various indications," Brailly said.

Having raised €20.3 million (US$27 million) in 2013 and a further €50 million in 2014, Innate has cash to see it through to the end of 2017. However, the deal with Astrazeneca puts things on a much firmer footing. "It is indeed a transformative agreement for Innate," Brailly said. "We do believe this provides the means to further develop and mature the portfolio."

Shares in Innate (Euronext Paris:IPH) rose by 46 percent to €13.04 on Friday, following announcement of the Astrazeneca link.

That more than made up for a 14 percent fall in the share price on March 26 that was prompted by bad news about another Innate antibody, IPH2012 (BMS-986015), that is partnered with Bristol-Myers Squibb Co.

A data safety and monitoring board called a halt to one treatment arm of a phase II trial in acute myeloid leukemia. However, a second arm in the 150 patient study is continuing and the trial remains unblinded.