The massive deal Jounce Therapeutics Inc. has cut with Gilead Sciences Inc., an agreement that could eventually add up to about $805 million, will strengthen Jounce’s ability to develop its pipeline and choose new partners, the company’s CEO and president told BioWorld.
“As we look at the capital coming into the company, especially the equity that’s coming in, as we look to that, we see that as a great opportunity to fuel our development programs,” Richard Murray said.
In the Gilead agreement, Jounce will receive $85 million up front for an exclusive licensing and development deal regarding JTX-1811, a monoclonal antibody designed to selectively deplete immunosuppressive tumor-infiltrating T regulatory (TITR) cells.
Jounce could receive up to $685 million in clinical, regulatory and commercial milestone payments and is eligible for royalties ranging from high single digit to midteens based upon worldwide sales.
Gilead also, as part of the deal, will make a $35 million equity investment in Jounce, which said the antibody remains on track for an IND filing in the first half of 2021. Should the IND clear, Gilead has the sole right to develop the antibody.
“We’re in good shape to get IND to the accepted stage,” Murray said. “That was in our plan anyway, prior to the business deal. That was front and center in our activities and budgeting, so we’re well staffed and enabled to do that.”
Gilead is a good fit for Jounce, Murray said, because it was interested in JTX-1811 “and cell biology in general. That’s the fundamental biology that 1811 addresses.”
JTX-1811’s target is CCR8, a chemokine receptor that is enriched on TITR cells. When JTX-1811 binds to CCR8, it targets TITR cells for depletion by an enhanced antibody-dependent cellular cytotoxicity mechanism, according to the company.
Kim Drapkin, Jounce’s chief financial officer, said the Gilead deal came about as Jounce examined the economics of a potential agreement, “but more important than the economics is who you’re going to be working with, if they have the same philosophy and the drive to move forward. Everything works great if you have that commonality.”
The two companies began talking about a deal before COVID-19 became a dominant factor in doing business, Drapkin added. Virtual deals can and are done commonly now, she said, but the negotiations “would be much harder to start from scratch if they were only virtual.”
The transaction is expected to close before 2020 ends.
Jounce stock (NASDAQ:JNCE) got an enthusiastic welcome from the market as shares soared 55.58% on Sept. 1 to close at $7.53, while Gilead (NASDAQ:GILD) sagged 1.38% to close at $65.83.
With the agreement nearing a close, Jounce is considering the programs it wants to continue driving. Cambridge, Mass.-based Jounce’s lead candidate, vopratelimab, is an ICOS agonist for treating solid tumors as a single agent and also as a combination treatment with other therapies. The company is focusing on two development paths for the program by realizing the biology of the ICOS hi CD4 T cells, their proliferation and vopratelimab’s sustained activation. The phase I/II ICONIC trial found vopratelimab safe and well-tolerated alone and in combination with Opdivo (nivolumab, Bristol Myers Squibb Co.), an anti-PD-1 antibody.
Preclinical data presented in June at the American Association for Cancer Research showed the emergence of a peripheral blood ICOS hi CD4 T-cell population is associated with durable responses to vopratelimab alone and in combination with Opdivo.
Murray also cited the company’s JTX-4014, an ICOS-targeting antibody plus PD-1 checkpoint inhibitor in a phase II study in combination with vopratelimab for treating non-small-cell lung cancer. The company said it expects to report clinical data in 2021.
Murray also mentioned JTX-8064, an antibody that targets leukocyte the immunoglobulin-like receptor B2 on macrophages. In June, Jounce regained the worldwide rights from Bristol Myers Squibb Co. It was licensed in July 2019 to Celgene Corp., later acquired by BMS, which terminated the deal when it streamlined Celgene’s pipeline. Jounce expects JTX-8064 to enter the clinic in 2020.
The Gilead deal will allow Jounce to drive both through potential inflection points, Murray said.