DUBLIN – Pieris Pharmaceuticals Inc. could earn more than €1.126 billion (US$1.183 billion) from a broadly based co-development alliance in immuno-oncology with Les Laboratoires Servier SAS, which will focus on developing bispecific anticalin-based molecules targeting a range of immune checkpoints and co-stimulatory receptors.

Boston-based Pieris is getting €30 million up front and up to €324 million in milestone payments linked to the lead program, PRS-332, and up to €193 million in milestones for each of four other programs. The alliance may be expanded to include three more programs, each of which would also have up to €193 million in milestones attached. That would push the headline value of the deal out to about $1.8 billion.

Pieris will retain U.S. rights to PRS-332, which is expected to enter the clinic in 2018, and has an option on U.S. rights for up to three other programs. The two companies will share preclinical and clinical development costs. Pieris would also receive tiered royalty payments, up to low double digits, for commercial sales of products in Servier's territories. It also would receive an extension fee should Servier opt to pursue the additional programs, as well as R&D funding.

Details of the checkpoint targets involved in the Pieris-Servier pact are scant for now, although the target pairs for the first five programs have already been defined. Pieris has previously revealed that PRS-332 targets programmed cell death protein-1 (PD-1) and one other undisclosed checkpoint. Servier already has a monospecific anti-PD-1 antibody in the locker, which it gained last year through a potential $980 million alliance with Sorrento Therapeutics Inc. (See BioWorld Today, July 12, 2016.)

How the two companies agreed on what to target "was actually somewhat serendipitous," Pieris CEO Stephen Yoder told BioWorld Today. Each firm had drawn up its own set of priorities, which they shared during the deal negotiations. "There was a strong overlap from the outset of the discussion, and that was exciting to see," he said.

Even if there is broad agreement between the two firms on what to target, how they will actually target the receptors is not a settled question. "There is still some flexibility on the protein source that will engage those targets," Yoder said. Servier's antibody portfolio could make a contribution – it is possible to generate fusions between an anticalin and an antibody fragment, as well as anticalins with multiple specificities.

Combination therapies are widely expected to supplant the first wave of monotherapies in immuno-oncology, as the latter have limited response rates. So far, however, only one combo has gained approval – Bristol-Myers Squibb Inc.'s Opdivo (nivolumab) and Yervoy (ipilimumab) regimen, which gained FDA approval in October 2015 for melanoma. Working out the details of which two targets to combine in a single agent remains a work in progress. T cell-centric mechanisms have also dominated the first generation of immuno-oncology agents, although newer approaches that target macrophages, natural killer cells and dendritic cells are beginning to gain prominence.

Pieris and Servier will focus initially on T cell-oriented approaches, which will involve both immune checkpoint blockade and targeted T-cell co-stimulation. A core principle underpinning the alliance – and one that is supported by preclinical research – is that bispecifics, properly designed, will trump combinations. "When you bias a drug to bind to the same T cell, that can and should bring a synergy," Yoder said. "Drug geometry can materially impact biology."

ADVANCING ANTICALINS

The deal does not represent Pieris' first foray into immuno-oncology. In late 2015, it entered a pact worth up to $416 million with Roche Holding AG, of Basel, Switzerland, under which Pieris will develop anticalin candidates against a single target. However, given its broad scope, the present deal is more akin to the recent mammoth alliance between Merus NV, of Utrecht, the Netherlands, and Wilmington, Del.-based Incyte Corp., which involves up to 11 bispecific antibodies and which is worth up to $3 billion. (See BioWorld Today, Dec. 9, 2015, and Dec. 22, 2016.)

It extends the company's cash runway into 2019 and enables it to fund its proprietary programs, including two molecules that are not included in the deal: PRS-343, a fusion between an anticalin that targets 4-1BB and an antibody that targets HER2, and PRS-342, which comprises a GPC3-targeting anticalin genetically linked via an antibody Fc domain to a 4-1BB-targeting anticalin.

In pursuing a bispecific approach with a post-antibody scaffold, Servier is demonstrating an aggressive appetite for innovation – with all the attendant risk that accompanies an unproven technology. Anticalins – invented by Pieris founder Arne Skerra at the Technical University of Munich – are engineered, low-molecular-weight protein binders derived from lipocalins, a protein family involved in the transport of hydrophobic molecules. They have high thermal stability, good tissue penetrance and are readily manufactured in bacterial expression systems.

The technology has 15 years of research behind it but remains distinctly early stage from a clinical development perspective. Just three molecules – all of them monospecifics – have entered clinical development so far. PRS-080, which targets hepcidin, is undergoing a phase I/II trial in anemic patients with chronic kidney disease. A data readout is expected later this year. Angiocal (PRS-050-PEG40), which targets vascular endothelial growth factor receptor, has completed a phase I trial in patients with solid tumors. DS-9001, which targets PCSK9 and which is partnered with Tokyo-based Daiichi Sankyo Co. Ltd., is undergoing a phase I trial in dyslipidemia patients.

PRS-343 is due to enter the clinic in 2017. So too is PRS-060, an inhaled anticalin in development for asthma, which blocks interleukin-4 (IL-4) and IL-13 signaling by binding the IL-4RA receptor.

Shares in Pieris (Nasdaq:PIRS) closed at $1.76, up 19.74 percent, or 29 cents.

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