DUBLIN – Blueprint Medicines Corp. is banking $775 million, including $675 million up front and another $100 million in equity investment, from a co-commercialization deal with Roche Holding AG and its Genentech subsidiary involving RET inhibitor pralsetinib. The deal also includes up to $927 million in development, regulatory and commercial milestones and tiered royalties on ex-U.S. sales.

The deal terms exclude the greater China region, where Cstone Pharmaceuticals Co. Ltd., of Suzhou, China, already holds rights. Shares in Blueprint (NASDAQ:BPMC) rose as much as 21% in premarket trading Tuesday on the news.

Basel, Switzerland-based Roche and Cambridge, Mass.-based Blueprint will co-commercialize pralsetinib in the U.S., where the drug is currently undergoing regulatory review as a therapy for Ret-mutant and Ret fusion-positive thyroid cancers. Roche will have exclusive rights to commercialize the product elsewhere, apart from territories included in the 2018 deal between Cstone and Blueprint.

The present deal will put Blueprint on a financially self-sustaining footing and eliminate any lingering disappointment attached to a recent complete response letter from the FDA nixing the use of its Kit kinase inhibitor, Ayvakit (avapritinib), in fourth-line gastrointestinal stromal tumor (GIST) (apart from cancers that are positive for platelet-derived growth factor receptor alpha exon 18 mutations, for which it is already approved). In addition to adding pralsetinib to its product portfolio, Roche has also gained an option to license a next-generation Ret inhibitor.

Roche and Blueprint now have Indianapolis-based Eli Lilly and Co. firmly in their sights. Lilly paid dearly to get its hands on the first-in-class Ret inhibitor Retevmo (selpercatinib), having acquired its original developer Loxo Oncology Inc. for $8 billion in February 2019. The drug duly gained accelerated approval in May in three cancer indications – non-small-cell lung cancer (NSCLC), medullary thyroid cancer (MTC) and other types of thyroid cancers – that involve a Ret gene alteration. Roche is some ways behind its rival but has paid far less for its entry ticket to this emerging oncology market.

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