DUBLIN – Sanofi SA is paying $1.1 billion up front and up to $350 million more in potential clinical development and regulatory milestones to acquire antibody developer Kymab Ltd. The deal adds to Sanofi’s pipeline first-in-class OX40-ligand (OX40L) blocker KY-1005, which recently hit the primary endpoints of a phase IIa trial in atopic dermatitis, as well as a second clinical-stage asset, KY-1044, an ICOS agonist in development for solid tumors. It also brings Sanofi a new antibody discovery platform, comprising several transgenic mouse strains, which collectively encode all the building blocks required to produce fully human antibodies.
Cambridge, U.K.-based Kymab had been the subject of IPO speculation since May 2019, when it submitted a draft registration statement to the U.S. SEC. “We were fortunate to have a number of options in front of us,” CEO Simon Sturge told BioWorld. The present transaction provides its investors with a faster – and, in the short term, more profitable – exit. The company, which had raised $220 million in equity funding since its formation in 2010, would have struggled to attain a $1.1 billion valuation on Nasdaq at this point in its development.
At the same time, the scale of the opportunity open to it is beyond the capability of a small biotechnology firm. KY-1005 was the main value driver for the deal. The antibody hit both safety and efficacy endpoints in the recently completed placebo-controlled trial, which recruited 88 patients with severe atopic dermatitis who either had an inadequate response to or were unable to take topical therapy. Kymab has yet to report the data publicly, but they obviously provided sufficient validation for Paris-based Sanofi to make a move. It was not the only party to do so. “We had about 18 companies interested,” Sturge said.
KY-1005 is not an orphan product but has potential application in a broad swath of autoimmune indications. OX40L is expressed on a wide variety of cells, including antigen presenting cells, activated CD4-positive T cells and activated CD8-positive T cells. Interaction with its cognate receptor, OX40, promotes T-cell survival and the induction of T-cell effector functions, while impairing the regulatory T-cell response.
“It’s a fundamentally different mechanism of action from most of the other products in development,” said Sturge. “This isn’t about mopping up an overexpressed cytokine.” It works more deeply, to restore an overstimulated immune system to a normal state. OX40L, moreover, offers a more selective way of targeting the signal than OX40. “The receptor is expressed everywhere. The ligand is only expressed in areas of inflammation,” Sturge said.
Given the drug’s broad applicability in T-cell-mediated autoimmune disease, a large organization like Sanofi will be better placed to explore its potential than Kymab. “Sanofi have 4,500 people in development. We probably have about 40,” Sturge said. The same argument applies to its Intelliselect antibody platform, first described in Nature Biotechnology in a paper published on March 16, 2014. “We’ve been through additional iterations of the platform,” Sturge said. It is now capable of producing bispecific antibodies, for example. Two such molecules, KY-1043, a PD-L1 blocker fused to an attenuated interleukin-2, and KY-1049, a factor VIII mimetic, are in its preclinical pipeline.
Sanofi’s acquisition of Kymab has echoes of its $4.8 billion takeover of nanobody pioneer Ablynx NV three years ago. Ablynx, of Mechelen, Belgium, was the more mature of the two companies, as it had a product undergoing regulatory review at the time of the transaction. But that deal also brought Sanofi a platform technology, which it said then would become the cornerstone of its efforts in immunology and immuno-oncology. Kymab now brings an alternative option to the table. “There’ll be an element of competition and an element of complementarity,” Sturge said. The deal is further evidence of Sanofi’s strong appetite for immunotherapy and immuno-oncology assets, following its $3.7 billion acquisition of Principia Biopharma Inc., in August, and its $358 million acquisition of natural killer cell developer Kiadis Pharma BV in November. Sanofi also paid $2.5 billion to acquire Synthorx Inc., a developer of cytokine-based drugs for cancer and autoimmune disease, in late 2019.
The transaction is due to close in the first half of this year. It removes from the U..K biotech sector yet another innovative antibody developer that once harbored ambitions to go all the way. Kymab, a spin-out from the Cambridge-based Wellcome Trust Sanger Institute, was co-founded by its chief scientific officer, Allan Bradley, and its chief operating officer, Glenn Friedrich. “It does take deep pockets and patient capital to really build such an organization,” Sturge said. “The critical mass of capital is in the United States.” Kymab’s shareholders include the Wellcome Trust Investment Division, the Bill and Melinda Gates Foundation, Schroder UK Public Private Trust plc (formerly Woodford Patient Capital Trust plc), the Woodford Equity Income Fund, Dublin-based Malin Corp. and series C investors ORI Healthcare Fund LP and Shenzhen Hepalink Pharmaceutical Co. Ltd. In addition, the London-based medical research charity Lifearc invested $30 million in the form of convertible redeemable preferred shares in 2019, which entitles it to receive its full investment back plus a dividend.