After one analyst earlier this month referred to Calithera Biosciences Inc.'s benefit from "pairing promiscuously" with the lead candidate in its pipeline, the company matched efforts in a different way with Incyte Corp. on an early stage prospect, and stands to collect not only $45 million up front and an $8 million equity investment but also as much as $430 million in milestone payments.

The money first in hand from Incyte, of Wilmington, Del., "increases our cash runway quite significantly," CEO Susan Molineaux said during a conference call with investors. Added funds would be gravy related to the progress of South San Francisco-based Calithera's first-in-class, small-molecule arginase inhibitor CB-1158, subject of the global collaboration and licensing pact between the firms, set to close this quarter.

CB-1158 is undergoing a monotherapy dose-escalation trial and more studies lie ahead to evaluate it in combination with immuno-oncology (IO) agents, including anti-PD-1 therapy. Co-funding development with Incyte, Calithera is entitled to a share of profits in the U.S., plus potential milestone payments and royalties. Would-be rewards down the road from Incyte, of Wilmington, Del., relate to progress spread out on the development, regulatory, and commercialization fronts. The equity investment came in the form of shares purchased at $4.65 each. Calithera (NASDAQ:CALA) closed Monday at $6.75, up $2.15, or 46.7 percent.

Under the terms, Incyte gets worldwide rights to develop and commercialize CB-1158 in hematology and oncology, while Calithera will hang on to certain rights to research, develop and commercialize other arginase inhibitors in orphan indications. "Those are primarily centered in pulmonary diseases. We're particularly interested in cystic fibrosis," as well as pulmonary arterial hypertension and others, Molineaux said. "We'll be doing that on our own, so we [would] fund that 100 percent, and we would expect the first foray into the clinic, if everything goes according to plan, to be in 2018," she said.

The duo will jointly proceed with development of CB-1158, Incyte leading the global push and paying 70 percent of costs, and they'll share in any future U.S. profits and losses (Incyte receiving 60 percent, Calithera 40 percent) if the compound wins approval. Calithera holds the right to co-detail CB-1158 in the U.S. and also would be eligible to receive from Incyte tiered royalties based on sales outside the U.S., with rates ranging from low-to-mid double-digits.

Included in the deal is an opt-out possibility for Calithera. To escape the co-funding obligations, the company would have to give up U.S. profits and losses, but would be eligible to receive as much as $750 million in milestone payments as CB-1158 moves along. The company could also bank reimbursement based on previous development expenditures, plus the tiered royalties as described.

H.C. Wainwright analyst Shaunak Deepak said in a research report at the start of the month that it was "too early for us to include CB-1158 in our valuation of Calithera [but] we are very interested" in the compound as a monotherapy and when used against solid tumors with the likes of Opdivo (nivolumab, Novartis AG).

TRIPLE DRUG REGIMEN MULLED

Calithera's lead candidate is the glutaminase inhibitor CB-839, undergoing phase I combo studies in renal cell carcinoma (RCC) and triple-negative breast cancer (TNBC). Phase II trials that could enable registration are expected to start this year. Meanwhile, interim data from the phase Ib RCC trial testing CB-839 in combination with Afinitor (everolimus, Novartis AG) turned up median progression-free survival (PFS) of 8.5 months in a patient population third-line or later. The result, though early, stacks up well with PFS rates reported for approved drugs in earlier lines of therapy: 3.8-4.9 months for Afinitor, 7.4 months for Cabometyx (cabozantinib, Exelixis Inc.), and 4.6 months for Opdivo. "Importantly, CB-839 and Afinitor demonstrate a safety profile that we believe does not look worse than Afinitor alone," Deepak wrote. "We think this is a notable asset for CB-839 as it would suggest that it could be combined not only with a mechanistic target of rapamycin inhibitor like Afinitor, but also potentially with tyrosine kinase inhibitors such as Exelixis' Cabometyx and IO agents such as Opdivo. Given the lack of data on safely combinable agents for the treatment of RCC, we believe this could lead to broad uptake among late-stage RCC patients with minimal competition." He guessed peak sales of $290 million in RCC, with the prospect of "considerable upside to our estimates if the Opdivo combination data in 2017 show improved responses among prior IO-naïve patients or non-responders."

At the recent San Antonio Breast Cancer Symposium, Calithera rolled out data from its ongoing phase Ib study of CB-839 with paclitaxel in patients with advanced TNBC, showing a 31 percent response rate. Investigators noted that all responders were taxane-refractory patients who would not have been expected to respond, suggesting that the mechanism of CB-839 may re-sensitize such patients. What's more, 50 percent of African American patients did well on the drug, a segment whose tumors use more glutamine. The finding "may encourage Calithera to investigate specific subpopulations in its anticipated randomized phase II trial of CB-839 combinations in TNBC" this year, in Deepak's view, and the approach "may provide CB-839 with an accelerated path to market."

Keith Orford, vice president of clinical development, said Calithera "see[s] the CB-839 development as completely separate and independent from this deal" with Incyte. "In terms of ongoing development, in our current study we've included a focus in lung cancer [and] colorectal cancer as well as melanoma and renal cell as well as a number of others in a separate cohort. All of that will continue. If anything, there may be some expansion of those efforts given the partnership with Incyte, but it certainly would not narrow that focus."

For Incyte, the Calithera deal "is relatively incremental," said J.P. Morgan analyst Cory Kasimov, "but we are encouraged to see the company continue to add to its early stage pipeline and increase its internal combination optionality." Preclinical data support the planned testing of CB-1158 with Incyte's epacadostat, an oral indoleamine 2,3-dioxygenase 1 inhibitor, he wrote in a report. Calithera "also noted that triple combinations (e.g., epacadostat plus a PD-1/PD-L1 drug plus CB-1158) make sense mechanistically," also based on preclinical data, he said. In June, Incyte launched Echo-301, a phase III trial testing epacadostat in combination with Kenilworth, N.J.-based Merck & Co. Inc.'s approved anti-PD-1 drug Keytruda (pembrolizumab) as first-line treatment for patients with advanced or metastatic melanoma. (See BioWorld Today, June 24, 2016.)