By Alex Philippidis
Exelixis (EXEL) was one of “at least five” companies interested in licensing rights to Insilico Medicine’s ISM3091, a small molecule ubiquitin specific protease 1 (USP1) inhibitor being developed to treat BRCA-mutant tumors, the company’s founder, chairman, and CEO Alex Zhavoronkov, PhD, shared with GEN Edge recently.
Earlier this month, Exelixis prevailed over those other companies by inking an exclusive license agreement in which it agreed to pay Insilico $80 million upfront and undisclosed potential payments tied to achieving development, commercial, and sales-based milestones—“a very substantial downstream,” Zhavoronkov said.
Viewed strictly in terms of deal dollars, he said, “the level of interest was so high that I think that we could have gotten a better deal.”
So why did Insilico entrust ISM3091’s future clinical development to Exelixis?
“Exelixis actually presented a story that blew my mind away when we met,” Zhavoronkov recalled in a wide-ranging interview.
Based in Hong Kong, privately-held Insilico discovers and designs drug candidates using generative artificial intelligence (AI). The company’s AI platforms use deep generative models, reinforcement learning, transformers, and other machine learning techniques for discovering novel targets and generating novel molecular structures with desired properties.
Insilico’s attraction to Exelixis begins with its successful development of the cancer drug Cabometyx® (cabozantinib), a kinase inhibitor indicated for renal cell carcinoma (RCC), both alone and in first-line treatment with Bristol-Myers Squibb’s Opdivo® (nivolumab); hepatocellular carcinoma in patients previously treated with sorafenib; and some patients with locally advanced or metastatic differentiated thyroid cancer (DTC).
Exelixis has grown Cabometyx into a blockbuster franchise. Cabometyx finished the first half of this year with U.S. net product revenue of $409.646 million, up 18% from $347.044 million in January–June 2022. For all of last year, Cabometyx racked up $1.401 billion, a 30% jump from $1.077 billion in 2021.
Exelixis’ results don’t include sales outside the U.S. Cabometyx is marketed by Ipsen in the rest of the world except Japan, where rights are held by Takeda Pharma.
Ipsen reported six-month 2023 cabo sales of €265.8 million ($281.5 million), up 25% from €212.2 million ($224.7) in January–June 2022, and 2022 sales of €448.7 million ($475.2 million), up 27% from €354.6 million ($375.6 million) in 2021.
Takeda racked up ¥2.1 billion ($14.1 million) in April–June of this year, down from ¥2.2 billion ($14.8 million) a year earlier. For the year ending March 31, cabo racked up ¥7.8 billion ($52.4 million), up from ¥6.5 billion ($43.7 million) in Takeda’s FY 2021.
Cabometyx won its first approval in the DTC indication in 2012, a year after the company made “cabo” its “sole focus” of development. But when the drug failed a Phase III trial in prostate cancer two years later, Exelixis eliminated about 70% of its workforce—160 jobs—and refocused its development of cabometyx on RCC, where it won its first FDA approval in 2016, second-line treatment in patients who already received an anti-angiogenic therapy. That was followed a year later by approvals for first-line treatment (2017) and combination with Bristol-Myers Squibb’s Opdio® (nivolumab; 2021).
“If you look Exelixis’ CEO (Michael M. Morrissey, PhD), I think he is one of the best CEOs in the industry, period. I’ve never seen anybody that detailed. The guy is an Elon Musk of drug discovery,” Zhavoronkov enthused. “[Morrissey] spent 20 years doing great work and actually succeeding, now treating patients and driving revenue. The reason I’m so admiring of them is because they are like us a little bit. They made it as a biotech, and they rescued cabo a couple times.”
Keeping it real
And by not disclosing milestone dollars that may or may never materialize, Exelexis showed Zhavoronkov that its PR folks were as savvy as their researchers: “They want to show what’s real and what’s not. It’s a very interesting company which talks about facts. They’re saying, Look, let’s do it right. We believe in data, right? And we want to generate the data first.”
By contrast, when Merck KGaA, Darmstadt, Germany announced two AI-based drug collaborations on Wednesday, its partners disclosed more than $1 billion in combined potential milestone details: German Merck agreed to pay Exscientia $20 million upfront, up to $674 million in milestones—compared with $10 million upfront, up to $594 million in milestones for BenevolentAI.
Investors seemed skeptical, however, as the stock prices of both partners fell: BenevolentAI dipped 1.5%, from 99 to 97.5 cents (returning to 99 cents on Friday), while Exscientia shares dropped 10.5%, from $5.06 to $4.53 (shares since more than rebounded, closing at $5.17 on Friday).
Asked if Insilico’s deal with Exelixis would be a model for future collaborations, Zhavoronkov replied: “I think this is a testament that AI, and generative AI very specifically, can produce really high quality assets that experts are willing to pay a lot of money for, and put their genius behind the targets you select.”
Discovered through Insilico’s Chemistry42 generative AI platform, ISM3091 is now under study in a Phase I trial (NCT05932862) that began in August and is projected to enroll 66 patients. The first-in-human, multicenter, open-label Phase I study consists of a dose escalation part followed by a dose selection optimization part. The study’s estimated primary completion date is July 27, 2024.
Zhavoronkov said ISM3091 represents a potentially best-in-class approach that has shown strong efficacy against multiple tumor cell lines and in vivo models with BRCA mutations, as well as in homologous recombination DNA repair (HRR)-proficient models, both alone and in combination with PARP inhibitors.
According to an abstract of a poster presented at the American Association for Cancer Research (AACR)’s Annual Meeting 2023, held in Orlando, FL, ISM3091 as a single agent showed tumor growth inhibition (TGI) of 66% at 30 mg/kg BID in triple-negative breast cancer (TNBC), and 60% at 50 mg/kg BID in ovarian cancer. ISM3091 also showed strong single-agent TGI of 72% at 50 mg/kg BID in an ovarian patient-derived xenograft (PDX) model with acquired resistance to olaparib in BRCA wild type—a result that suggests the USP1 inhibitor has the potential to treat tumors with HRD beyond patients with BRCA mutations, and overcome PARP inhibitor resistance.
When given in combination with AstraZeneca’s Lynparza® (olaparib), ISM3091 showed stronger and more durable anti-tumor response, even at low doses. The combo of ISM3091 3 mg/kg BID plus olaparib, 50 mg/kg QD showed TGI of 91% in TNBC, while ISM3091 50 mg/kg BID + olaparib, 50 mg/kg QD demonstrated a 110% TGI in ovarian.
“We believe preclinical data on ISM3091’s potent anti-tumor activity, tolerability, and pharmacokinetics set the compound apart from competing USP1 inhibitors and make it an important addition to Exelixis’ growing clinical-stage pipeline,” Dana Aftab, PhD, Exelixis executive vice president, Discovery and Translational Research and chief scientific officer, said in a statement.
USP1 is a target of growing interest in biopharma circles given its crucial role in DNA damage response and repair, namely by removing ubiquitin from multiple substrates including proteins that stabilize the “replication fork”—the region where the two strands of DNA are separated to allow replication of each strand.
That has led to its emergence as a new synthetic lethal target for cancer treatment. The first drugs approved to leverage synthetic lethality have been poly (ADP-ribose) polymerase (PARP) inhibitors, which have shown positive clinical effects in many patients. However, between 40% and 70% of patients have developed resistance over time to PARP inhibitors, which has fueled interest in alternatives by Insilico and other drug developers.
Furthest ahead in USP1-targeted clinical development until now has been KSQ Therapeutics, which last December launched the Phase I KSQ-4279-1101 trial (NCT05240898), designed to assess the company’s USP1-targeting small molecule KSQ-4279 in patients with advanced solid tumors across multiple indications. KSQ-4279 is being studied both in combination with a PARP inhibitor, and in combination with chemotherapy. Estimated primary completion date for the 64-patient trial is June 24, 2024.
In July, Roche agreed to be fully responsible for further development of KSQ-4279 as of 2024, through a global license and collaboration agreement whose financial terms were undisclosed. Roche agreed to pay KSQ an upfront payment plus potential milestones and royalty payments.
Also developing a USP1-targeting drug is Debiopharm, which in March acquired for an undisclosed price global rights from Novo Nordisk to FT-3171 (renamed Debio 0432), which targets an undisclosed novel DNA damage repair pathway and is in late preclinical phases.
Zhavoronkov said the growing interest in USP1 was just one reason why Insilico chose to partner ISM3091 rather than develop it in-house. The other was Insilico’s crowded pipeline, which consists of 31 programs aimed at 29 targets.
ISM3091 is one of nine disclosed Insilico pipeline programs for oncology indications, making cancer the company’s largest therapeutic area.
Zhavoronkov also offered updates on several Insilico pipeline candidates:
- ISM018_055: Insilico’s lead candidate is a small molecule inhibitor treatment for idiopathic pulmonary fibrosis (IPF) that dosed its first Phase II patient earlier this year and is now in two Phase II 60-patient double blind placebo control trials—one in the U.S., one in China. One trial is assessing a once-daily 60 mg dose; the other, two 30 mg doses. Data is likely to be released at the end of next year, Zhavoronkov said. Citing competitive reasons, Insilico has not disclosed the drug’s target, calling it “Target X,” though Zhavoronkov told GEN last year the target was a regulator of at least three pathways implicated in fibrosis.
- ISM3312: The oral small molecule 3CLPro inhibitor designed to treat COVID-19 is in a Phase I trial launched earlier this year. Zhavoronkov said earlier this month ISM3312 is envisioned as an alternative to Pfizer’s COVID antiviral Paxlovid® (nirmatrelvir tablets and ritonavir tablets) and Merck & Co.’s Lagevrio™ (molnupiravir).
- ISM8207: The small molecule QPCTL inhibitor, which Insilico says is potentially first-in-class, is being co-developed with Fosun Pharma as a treatment for advanced malignant tumor In August, Insilico said the companies had advanced ISM8027 into Phase I studies. The companies agreed to partner last year, with Insilico licensing to Fosun 50% rights to the drug. Fosun paid Insilico $13 million upfront and agreed to make an equity payment into Insilico, plus pay up to $82 million tied to achieving milestones.
- MAT2A inhibitor: A methionine adenosyltransferase 2α (MAT2A) inhibitor envisioned as a treatment for MTAP-deficient cancer though synthetic lethality is in the IND-enabling phase. Zhavoronkov contrasted Insilico’s commitment to the target vs. GlaxoSmithKline’s termination last year of a collaboration to develop IDEAYA Biosciences’s MAT2A inhibitor IDE397, now under development as monotherapy and in combo with Amgen’s AMG 193: “We didn’t stop working on MAT2A. We actually proceeded. So that kind of shows you my approach target picking.”
- ENPP1 inhibitor: An ectonucleotide pyrophosphatase/phosphodiesterase 1 (ENPP1) inhibitor envisioned to treat solid tumor cancers is in the IND-enabling phase: “ENPP1 is likely to be like the hottest target a year from now.”
The deal with Insilico hardly budged Exelixis stock, which inched up 0.5% the day it was announced September 12, from $21.99 to $22.09. Shares have since dipped 3%, closing Friday at $21.48.
Filing for IPO
Unlike Exelixis, Insilico is not public—yet. But on June 28, Insilico disclosed plans for an initial public offering on the Stock Exchange of Hong Kong, in a public filing that listed Morgan Stanley and China International Capital Corp. (CICC) as joint sponsors.
The amount of capital the company plans to raise, and the timetable for the offering, were among details redacted from the public version of the filing—though the South China Morning Post, citing unnamed sources, has reported that the company plans to raise approximately $200 million. Zhavoronkov would not comment on the IPO filing.
According to the filing, Insilico had raised up to that point a total $407.5 million in seven financings that included three series C rounds totaling $270 million in 2021, and two Series D closings totaling $94.7 million last year.
Also in 2022, Insilico generated $27.3 million in revenue from its top five customers, accounting for 90.6% of total revenues, the filing stated. That would put Insilico’s 2022 revenues at over $30.1 million.
Insilico disclosed in the filing that a single unnamed customer accounted for more than half (56.6%) of its revenues in 2022, $17.066 million. Insilico described that customer as “a global innovation-driven pharmaceutical and healthcare industry group, operates businesses including pharmaceutical manufacturing, medical devices, medical diagnosis, and healthcare program.”
If Insilico carries out the Hong Kong IPO, it would be a change from what Bloomberg News reported in 2021 was an earlier plan to go public through a confidential filing in the U.S. seeking to raise “around $300 million.” Insilico has not commented on that report, for which Bloomberg cited unnamed sources.
Speaking to the South China Morning Post in June, however, Zhavoronkov offered a rationale for an IPO filing in Hong Kong: “We are a truly global company with R&D centers in many countries and regions. But Hong Kong is where we discover our targets—the most important part of drug discovery and I built an expert team to focus on this and to become the best in the world in this area.”
Leaders & laggards
- ARS Pharma (SPRY) shares plunged 56% on Wednesday, from $6.605 to $2.92, after the FDA stunned the company by refusing to approve its neffy® (epinephrine nasal spray) as a treatment for allergic reactions (Type I), including anaphylaxis for adults and children weighing ≥30 kg (≥66 lbs.). Instead, the agency issued a complete response letter (CRL) requesting a PK/PD study assessing repeat doses of neffy compared to repeat doses of an epinephrine injection product under allergen-induced allergic rhinitis conditions. The request was an about face for the agency, which in August agreed with the company to conduct the trial as a post-marketing study. In May, the FDA’s Pulmonary-Allergy Drugs Advisory Committee (PADAC) recommended approval of neffy without additional studies. ARS plans to appeal the CRL by filing a Formal Dispute Resolution Request.
- Seelos Therapeutics (SEEL) shares cratered 84% over three days, starting with a 69% slide from an even $1 to 31 cents on Wednesday, after the company acknowledged that a Phase II trial (NCT04669665) assessing its lead pipeline candidate SLS-002 in adults with major depressive disorder who are at imminent risk of suicide did not meet the pre-defined primary endpoint (MADRS ANCOVA at 24 hours post dosing). Only 147 patients were randomized—67% of the study’s target enrollment of 220 patients, due to financial constraints, Seelos said. Chief Medical Officer Tim Whitaker, MD, stated, however, that SLS-002 showed both meaningful early and persistent improvement in depressive symptoms, as well as clinically meaningful reduction in acute suicidality symptoms relative to standard of care. Investors didn’t agree; shares nosedived another 39% to 19 cents after Cantor Fitzgerald downgraded the stock from “Overweight” to “Neutral,” then fell another 16% to 16 cents on Friday.
- Travere Therapeutics (TVTX) shares plummeted 41% on Thursday, from $12.88 to $7.64, after the company released topline two-year confirmatory secondary endpoint results stating that its pivotal Phase III PROTECT trial (NCT03762850) assessing Filspari® (sparsentan) versus irbesartan in IgA nephropathy (IgAN) narrowly missed statistical significance in estimated glomerular filtration rate (eGFR) total slope—but achieved statistical significance in eGFR chronic slope, for purposes of regulatory review in the European Union. Travere said it expects to submit a supplemental New Drug Application (sNDA) in the first half of 2024 for full approval of Filspari, which the FDA approved in February under accelerated approval.
Alex Philippidis is Senior Business Editor of GEN.