NovImmune SA entered its first product out-licensing pact, a deal with Serono SA, which is potentially worth up to $122 million for two preclinical fully human antibodies, NI-0401 and NI-0501.
In return for obtaining exclusive worldwide commercialization rights, Serono is paying NovImmune a $5 million license fee, purchasing an equity stake in the firm for CHF7.5 million (US$6.1 million) and it is funding a convertible loan of the same amount. In addition, it would pay up to $105 million in milestones should both products undergo commercialization in a single indication. It would make further undisclosed milestone payments for product approvals in additional indications. It also would pay royalties.
NovImmune retains responsibility for developing the compounds through completion of Phase IIa trials. Geneva-based Serono will assume further development responsibility and costs thereafter.
"In its structure it's much more a Phase II kind of deal," NovImmune CEO Jack Barbut told BioWorld International. That's because the two products in question represent fully human versions of antibodies that already have been validated in the clinic.
NI-0401, which NovImmune generated using the HuMab transgenic mouse technology developed by Medarex Inc., of Princeton, N.J., targets the CD3 antigen, a receptor involved in T-cell activation. The antibody has potential application in a range of autoimmune and inflammatory disorders, including insulin-dependent diabetes, Crohn's disease, multiple sclerosis, rheumatoid arthritis and organ transplant rejection. A murine monoclonal antibody to the same target, Orthoclone OKT3 (muromonab-CD3), was developed by Johnson & Johnson, of New Brunswick, N.J., during the 1980s but has been associated with cases of anaphylactic shock, cardiovascular problems and life-threatening episodes of cytokine release syndrome. NI-0401 is due to enter clinical trials in the fall.
NI-0501, which NovImmune generated using phage display technology licensed from Cambridge Antibody Technology Group plc, of Cambridge, UK, binds interferon-gamma, a cytokine that has a key regulatory role in the immune and inflammation responses. It is overexpressed in several conditions, including systemic lupus erythematosus, Crohn's disease and several forms of vasculitis. Protein Design Labs Inc., of Fremont, Calif., has developed a humanized monoclonal antibody to the same target, Huzaf (fontolizumab), which is in clinical development for moderate to severe Crohn's disease. Barbut said NI-0501 has exhibited 10 times greater potency in preclinical studies. It is due to enter the clinic in the second half of next year.
For Geneva-based NovImmune, the deal represents a validation of its capabilities in immunotherapy prior to seeking a second round of venture capital funding. "It made more sense for us to first have the large pharma deal in place," Barbut said. "The products were at the right stage. The interest in the compounds was sufficiently large to make it possible for us to enter a deal at this stage."
The company commenced operations at the beginning of 2001, having completed a first-round financing deal worth CHF15 million the previous year. In addition to its antibody development programs, it has a second platform focused on discovering small-molecule inhibitors of MHC Class II antigens.