Kiadis Pharma NV’s takeover last year of Cytosen Therapeutics Inc. to get a natural killer (NK) platform paid off in a potentially huge way, with Sanofi SA paying €17.5 million (US$19.7 million) up front in a licensing deal with as much as €857.5 million more if preclinical, clinical, regulatory and commercial goals are reached, as well as up to double-digit royalties.

The arrangement is centered on Amsterdam-based Kiadis’ preclinical K-NK004 programs, kept under wraps until now. Specifically, it covers a CD38 knockout (CD38KO) K-NK therapeutic for combination with anti-CD38 monoclonal antibodies, including Sanofi’s recently approved Sarclisa (isatuximab-irfc) for multiple myeloma (MM). Sanofi gained the FDA’s go-ahead for Sarclisa in March. Included as well for Sanofi are exclusive rights to use Kiadis’ K-NK platform with two undisclosed preclinical programs.

Treatment of MM with anti-CD38 antibodies such as Sarclisa depletes the patients’ own NK cells, since they also express CD38. Kiadis’ CD38KO K-NK cells are modified to prevent that depletion by providing an adjunctive infusion that reinvigorates the synergy between NK cells and antibodies to attack tumors.

Kiadis is hardly alone in the NK space, with such players as San Diego-based Fate Therapeutics Inc. – which deploys a much different platform, one that involves induced pluripotent stem cells – vying for position. “We believe our NK cells are just better,” Kiadis CEO Arthur Lahr said during a conference call with investors. “Based on an indirect comparison, it seems clear that our knockout efficiency has been better than Fate’s.” He declined to comment on the status of the research activities related to Sarclisa now, or the planned timeline to reach the clinic. Regarding the future payments, he said the companies are only disclosing the “the combined package” of would-be payments. “It’s the usual suspects,” he said. “The vast majority of these milestones is for the lead program, the CD38 knockout.” Sanofi will be responsible for and will bear all costs related to R&D, manufacturing, regulatory and commercial activities; Kiadis will supply PM21 particles and select universal donors for Sanofi, paid for by the latter.

In May, Kiadis unveiled new data related to the K-NK platform at the International Society of Cell & Gene Therapy virtual meeting. Findings showed how cytokine pre-activation enhances Kiadis’ PM21-particle-driven NK cell expansion. NK cells from healthy donor-derived peripheral blood mononuclear cell were stimulated overnight with interleukin-12 (IL-12), IL-18 and IL-15 and then expanded with the particles, which yielded a significantly increased further expansion of NK cells than with PM21 by itself. Also, the preactivated NK cells pumped out even larger amounts of interferon gamma and proved very responsive to activation by K562 tumor cells or cytokines, the company noted.

The platform previously owned by Dallas-based Cytosen makes use of a proprietary algorithm that identifies optimal donors for universal NK cell therapies, based on activating KIR receptors and optimized mismatching of HLA-KIR genes, as well as favorable NKG2A/NKG2C ratios. The expansion process incorporates native membrane particles expressing membrane-bound IL-21 and 41bbL, which does away with the need for feeder cells, Piper Sandler analyst Edward Tenthoff pointed out in a June 25 report with a neutral rating on Kiadis, which he has since upgraded to overweight. IL-21 specifically elongates telomerase and prevents senescence.

The stock-based Cytosen transaction was valued at just €19.4 million (then US$21.9 million) at the start but could be worth up to €77.5 million altogether if six development and regulatory goals are reached, including U.S. approval of a product.

Sanofi’s license does not include rights to K-NK002 and K-NK003 or any other Kiadis programs, now or to come. In June, Kiadis said the first patient had enrolled in phase I study sponsored by Ohio State University in relapsed/refractory acute myeloid leukemia (AML) and myelodysplastic syndromes with off-the-shelf K-NK003. Data from the recent virtual European Hematology Association and American Society of Clinical Oncology meetings bespoke promising proof-of-concept for the FC21 NK cell therapy on which K-NK003 is based. The dose-finding study will evaluate safety and overall response rate, with first data due to roll out next year. Gatekeepers have cleared the IND for Kiadis’ K-NK002 phase I/II NK-Realm study to test the prospect with post-transplantation cyclophosphamide in patients undergoing a haploidentical hematopoietic stem cell transplant. Also likely to provide preliminary data next year, the effort will measure post-transplant relapse.

Jefferies analyst Philippa Gardner called the Sanofi arrangement “a strong first external endorsement” for the acquired platform, and in a research report predicted $1 billion in peak sales for Sarclisa. “We currently assign no value in our Kiadis valuation for K-NK004,” she added, since clinical work probably won’t begin until 2022. Piper Sandler’s Tenthoff said in his report that he “continue[s] to value wholly owned K-NK002 and K-NK003 in AML at $50 million each,” which could increase if future data merit. “We are adding [to our model] $100 million in total for the Sanofi alliance, comprised of $50 million for [the CD38 NK cell program] and $25 million each” for the two undisclosed preclinical pushes.

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