Jounce Therapeutics Inc. will receive a $225 million up-front payment and a $36 million equity investment as part of a five-candidate immuno-oncology (I-O) collaboration with Celgene Corp. The deal includes Jounce's lead candidate, JTX-2011, an inducible T-cell co-stimulator (ICOS), and as many as four early stage immunotherapies targeting B cells, T regulatory cells and tumor-associated macrophages.
Altogether, the deal promises up to $2.3 billion in potential regulatory, development and sales milestones across all programs reaching commercialization, plus potential tiered royalties on ex-U.S. sales. Celgene also gains an option to equally share a checkpoint I-O program, a factor that could come into play as the partners explore both monotherapy and combination approaches following positive data seen in preclinical combo studies that Jounce presented at the American Association of Cancer Research annual meeting earlier this year.
Summit, N.J.-based Celgene will have exclusive ex-U.S. commercialization rights for all of the covered programs, though Jounce is eligible to receive a royalty on any resulting ex-U.S. sales. Celgene and Jounce will equally share profits globally for the checkpoint program.
As structured, the agreement puts Cambridge, Mass.-based Jounce in the lead for global development of JTX-2011, giving it the larger slice of a 60/40 split of potential U.S. profits from the program. Tables turn for the second covered program, with Celgene taking three-quarters of potential profits while leaving Jounce 25 percent. Terms even out as the partnership progresses, with Jounce and Celgene equally sharing U.S. profits on up to three additional programs. After opt-in, all development costs will be shared along the same lines.
As a small company, composed of about 60 employees today, "it was very important to us to ensure that we had meaningful economics, good skin in the game and a majority share of the U.S. commercial rights," Jounce President and CEO Rich Murray told BioWorld Today.
Murray, who served as senior vice president in Merck & Co. Inc.'s biologics and vaccines division during the development of the first anti-PD-1 checkpoint inhibitor approved in the U.S., Keytruda (pembrolizumab), said he sees Jounce's approach as part of the "immuno-oncology 2.0" wave. "We've all appreciated the terrific news of the PD-1 inhibitors and the impact they can have for patients," he said. "But as the dust has settled a bit on that now, it's clear that it's still a minority of patients that are responding to the approved drugs."
The lead program targeting ICOS stemmed from work by Jounce co-founder and Yervoy (ipilimumab, Bristol-Myers Squibb Co.) researcher James Allison, who currently serves as chair of the University of Texas MD Anderson Cancer Center Department.
Jounce and Celgene will soon start testing both single-agent JTX-2011 and combinations of the candidate with an already-marketed PD-1 in phase I safety studies. "We'll be doing a fair amount of PK and PD work in that context to look at changes in immune cell populations," Murray said. Next they'll move on to phase II testing both the single in a variety of solid tumors, including non-small-cell lung cancer, head and neck cancer and a few other small tumors. Within those indication, they'll be selecting for patients they expect will most likely respond to the drug.
In a nod to drugmakers' growing focus on precision medicine, Robert Hershberg, Celgene's chief scientific officer, pointed to Jounce's "focus on the development of novel cancer therapies matched to patient populations most likely to respond."
The deal arrives about nine months after Jounce landed $56 million in series B financing targeted at advancing its pipeline and moving into the clinic. The oversubscribed round included investments from Wellington Management Co., Redmile Group, Nextech Invest, Pharmstandard International SA, Cormorant Asset Management, Omega Funds, Casdin Capital, Foresite Capital Management and an undisclosed blue chip public investment fund. Prior to that, the company was funded by Third Rock Ventures, the sole investor in its 2013 $47 million series A round. (See BioWorld Today, Feb. 14, 2013, and April 23, 2015.)