Infinity Pharmaceuticals Inc.'s hefty deal with Abbvie Inc. provides $275 million up front and the potential for $530 million more if milestones are met with duvelisib, also known as IPI-145, already in phase III trials as a blood cancer monotherapy and ripening for combination use.

At the same time, Cambridge, Mass.-based Infinity made known a clinical supply agreement with Roche AG, of Basel, Switzerland, under which Roche will supply its Gazyva (obinutuzumab) for combo studies with duvelisib, an inhibitor of phosphoinositide-3-kinase (PI3K)-delta and PI3K-gamma. There's a material transfer pact as well, under which Infinity is supplying Roche with duvelisib for use in Roche's preclinical and translational research. Gazyva was approved last year for chronic lymphocytic leukemia (CLL). (See BioWorld Today, Nov. 4, 2013.)

In 2014, Infinity plans to start a phase Ib/II study with duvelisib combined with Gazyva or Rituxan (rituximab, Biogen Idec Inc. and Roche AG) in previously untreated indolent non-Hodgkin's lymphoma (iNHL). Infinity also expects to begin this year a phase Ib trial with duvelisib/Gazyva in patients with CLL whose disease has progressed following treatment with a Bruton's tyrosine kinase inhibitor such as Imbruvica (ibrutinib), cleared in the U.S. around the same time as Gazyva. Imbruvica was developed by Pharmacyclics Inc. and Johnson & Johnson unit Janssen Biotech Inc., as a single agent to treat patients with mantle cell lymphoma who received at least one prior therapy. (See BioWorld Today, Nov. 14, 2013.)

"We see that as an area where there will be a growing patient population," Adelene Perkins, CEO of Cambridge, Mass.-based Infinity, told BioWorld Today. "None of the current agents is curing these patients."

Perkins said other combos are in the works. "What we have not done is describe specifically which drugs we've seen that synergy with, and we will disclose that as we begin to initiate trials," she said. "What we can say is that we've done a lot of work in the laboratory, and preclinically we've shown a number of drugs that show profound synergy with duvelisib."

RBC Capital Markets analyst Michael Yee spotlighted ABT-199, the selective inhibitor of B-cell lymphoma-2 proteins, in development by Abbvie and Roche. "It's reasonable to assume [the two firms] want to get ABT-199 to market first (could be as early as the end of 2015 or early 2016), and then work to combine with [duvelisib]," he wrote in a research report.

"Management suggested there were multiple parties that did diligence on [duvelisib]," Yee noted. "Also, we find it more compelling all this was done despite the fact that [Gilead Sciences Inc.'s Zydelig (idelalisib)] has a black box" warning, which "presents risk for a class-label [on duvelisib], so we believe Abbvie must be comfortable on the safety profile."

Zydelig, the first-in-class oral PI3K delta inhibitor, won July FDA approval in three hematological cancers: traditional approval in patients with relapsed CLL in combination with Rituxan; and accelerated approval in relapsed follicular B-cell non-Hodgkin's lymphoma and relapsed small lymphocytic lymphoma, two types of iNHL, with Zydelig to be used in those patients who have received at least two prior therapies. (See BioWorld Today, July 24, 2014.)

MILLENNIUM PAYOUT: NO WORRIES

Infinity already has under way the phase II trial called DYNAMO in iNHL and a phase III experiment in patients with CLL called DUO. Both are monotherapy studies. In the staged development strategy designed by Infinity, the monotherapy approach "allows us the possibility to get approved most quickly, and see clearly the single-agent activity" so that the first natural combos can be discerned on the "new frontier, where people are just beginning to think about and launch studies that combine multiple targeted agents," Perkins said.

Of the potential milestone payments in the deal with North Chicago-based Abbvie, up to $405 million relate to goals achieved through the first commercial sale of the compound, which should more than offset money in milestone payments that may be due to Millennium: The Takeda Oncology Co. for sales in oncology of duvelisib. Infinity paid $5 million early last month for an option to terminate its obligation to pay Millennium future royalties on the compound, and before March 31, 2015, can pay Millennium $52.5 million to end the royalty deal.

"We felt there was an opportunity to structure the relationship with Millennium in a way that was attractive to them and would position us well for a strategic partnership where we and the partner, [which is] making a considerable investment, would have a greater share of the downstream value," Perkins said.

"The financial structure of the deal with Abbvie is very important, well beyond any payments to Millennium," and is meant to ensure a broad development strategy for duvelisib, Perkins said. The harvest of cash "if we're successful in selling the first capsule" will allow more combo trials with the compound, as well as experiments in relapsed/refractory patients, she said, and "if we exercise the Millennium option, our ongoing obligations to them are relatively small in comparison" to what's gained from the Abbvie arrangement.

"I think there was a misunderstanding" among some analysts, Perkins said. "We have some milestones that are still due to Millennium, but they're split between regulatory and commercial milestones, and they're also split between two distinct products" – and are further split according to U.S. vs. ex-U.S. terms, she added.

Wall Street had the matter more than sorted out by day's end, and Infinity's stock (NASDAQ:INFI) closed Wednesday at $15.73, up $4.81, or 44 percent, after trading as high as $16.93.