Aimmune Therapeutics Inc. wasted no time moving ahead after last week’s FDA approval of Palforzia for peanut allergy as the Brisbane, Calif.-based company obtained an exclusive worldwide license to develop and commercialize Xencor Inc.’s humanized monoclonal antibody, XmAb-7195, for treating allergic asthma. It also received another multimillion-dollar investment from Nestlé Health Science to fully fund the company.
Aimmune plans to develop the Xencor antibody as an adjunctive treatment with Palforzia and other select programs to treat patients with food allergies. Aimmune renamed XmAb-7195 as AIMab-7195, whose mechanisms of action reduce blood serum lgE and suppress lgE-producing cells. AIMab-7195 is an anti-IgE monoclonal antibody with enhanced binding to the Fc gamma receptor IIb. It can activate immune cells, such as mast cells and basophils, that drive a patient’s allergic response. It is designed to clear IgE rapidly from circulation in order to prevent production of IgE by preventing the activation of IgE-positive B cells and to block IgE from interacting with its receptor on immune cells.
“We feel that now is the perfect time to begin to explore that biology and think about the next generation of food allergy,” Dan Adelman, Aimmune’s chief medical officer, told BioWorld.
Aimmune will pay $5 million in cash up front to Xencor and $5 million in equity. Xencor could receive up to $385 million in clinical development, regulatory and commercialization milestones.
SVB Leerink’s analysts like the cut of the deal’s jib, especially for Xencor.
“Overall, we view [Xencor]'s ability to monetize this noncore asset as positive for the company, given that most investors had already written off this program as it had been deprioritized and positioned for a strategic partnership for a few years already,” Leerink analysts Jonathan Chang, John Barrett and David Ruch wrote Feb. 5. “The deal also aligns with the broader company strategy to focus on their bispecific and cytokine programs in oncology.”
Nestle’s third investment
As Aimmune readies for Palforzia’s launch, there are exacting details being scrutinized, such as the label wording.
“We couldn’t finalize printing of packing until FDA signed off on the label, so we need a couple weeks to do that,” Eric Bjerkholt, Aimmune’s chief financial officer, told BioWorld. “Plus, REMS [risk evaluation and mitigation strategy] needs to be fully operational before allergists can write scrips for patients. The FDA comments on the packaging and the wording come last. There’s no point in printing until it’s all done.”
Nestlé Health Science had already chipped in $273 million to Aimmune’s cause before it added the new, $200 million investment. When the transaction closes, Nestlé’s will own 19.9% of Aimmune’s outstanding common stock and voting power and a 25.6% overall stake in the company’s fully diluted capitalization.
This is Nestle’s third investment in Aimmune. In November 2018, it invested $98 million, increasing its ownership stake to $273 million, or approximately 19%. At that time, the companies also entered a two-year extension of their original two-year strategic collaboration focused on food allergy therapies. The agreement did not contain partnership, collaboration or negotiation restrictions on Aimmune, which retains all rights to its current and future pipeline assets. Nestlé, the world's largest food company, first brought a $145 million equity investment to Aimmune in November 2016.
Bjerkholt said Aimmune is now truly fully funded, though the company was already in a solid financial position.
“Recall, we have postulated that a strong Palforzia launch could serve as a classical short squeeze on what has been a stubbornly high short position,” wrote Piper Sandler analysts Christopher Raymond, Allison Bratzel and Nicole Gabreski on Feb. 5. “With this additional investment, we think the prospect of an outright take-out by Nestle (or anyone else for that matter) has to be factored in more than before.”
Aimmune’s stock (NASDAQ:AIMT) ended the day 3.1% higher at $30.28.