Astellas Pharma has acquired Xyphos Biosciences for up to $665 million, the companies said today, in a deal intended to bolster the buyer’s cancer immunotherapy pipeline with Xyphos’ Advanced Cellular Control through Engineered Ligands (ACCEL) technology platform.

Headquartered in South San Francisco, Xyphos is a developer of immuno-oncology therapeutics that apply the company’s ACCEL platform, designed to enable a patient’s own natural immune cells to be redirected by bispecific antibodies or to be re-programmed to express a highly flexible and versatile chimeric antigen receptor (CAR).

According to Xyphos, the proprietary technology is intended to enable exclusive or preferred delivery of various classes of single or multiple targeting and modulating agents, including bispecific antibodies, cytokines, and kill functions. The convertibleCAR-cells produced through the platform can be specifically directed to tumor cells, and their activity towards tumor destruction can be tightly controlled from outside the CAR-cell, which Xyphos reasons will potentially lead to safer and more efficacious treatments.

Xyphos’ first convertibleCAR cell product candidate is in preclinical development and is scheduled to be tested in a first-in-human clinical study in 2021.

Oncology is Astellas’ largest area of therapeutic interest, accounting for half of the company’s R&D expense—which for the fiscal year that ended March 31, 2019, was ¥208.7 billion ($1.9 billion), down 5.5% from the previous fiscal year. Astellas’ other therapeutic areas include urology, nephrology, immunology, neuroscience, muscle diseases, ophthalmology—as well as treatment categories that include regenerative medicine, gene therapy, and vaccines.

Astellas has added to its pipeline in recent weeks through acquisitions that include its planned $3 billion purchase of gene therapy developer Audentes Therapeutics; and an up-to-$795+ million collaboration with Pandion Therapeutics to research, develop, and commercialize locally acting immunomodulators for autoimmune diseases of the pancreas. In December 2018, Astellas agreed to spend up to $404.7 million to acquire Potenza Therapeutics, in a deal that also bolstered the buyer’s cancer immunotherapy pipeline.

“Commitment to immuno-oncology”

“Astellas’ commitment to immuno-oncology makes them an ideal partner to advance our proprietary NKG2D-based NK-cell and T-cell platform to the next stage of clinical exploration,” Xyphos CEO James Knighton said in a statement.

Xyphos says its convertibleCAR technology applies an immune surveillance pathway involving NKG2D receptors that are present on natural killer (NK) cells, T cells, and some macrophages. There are eight natural ligands, MHC-class I-like Complex (MIC) proteins, for human NKG2D receptors that are rarely expressed on healthy cells. When stressed by any one of several factors, otherwise healthy cells may decorate their surfaces with one or more MIC-ligands for NKG2D.

The α1-α2 domain of the natural ligands provides the binding site for the NKG2D receptor. The NKG2D receptors then bind their ligands and cluster on the NK-cell surface activating the NK-cell machinery to mount an attack to kill the decorated, stressed cell. Xyphos’ technology mutates the natural NKG2D receptor so that it no longer binds any of its natural ligands; this becomes an inert NKG2D (iNKG2D).

Xyphos has also created mutant ligands that no longer bind the natural NKG2D receptor but do bind with the engineered iNKG2D. Intact human antibodies are fused to the modified ligands to direct these “orthogonal ligands” to a specific target site, for example, on a cancer cell. This orthogonal ligand fused to the antibody (a MicAbody™) can thereby bind both the iNKG2D on an engineered T-cell and the targeted cancer cell.

When MicAbody proteins targeting the tumor-associated antigen are introduced in an appropriate dose, they decorate the surface of the target cell plus bind the iNKG2D on the convertibleCAR-T cells.  This bridging effects clustering of the iNKG2D receptors on the convertibleCAR-T cell, activates the T-cell, and the target cell to which the convertibleCAR-T cell is now bound is aggressively attacked and destroyed. The ability to multiplex or sequentially switch the targeting with MicAbodies allows the targeting of multiple antigens while avoiding the need for new CAR-T cells.

Partnership with Parker Institute

In October 2018, Xyphos agreed to partner with the Parker Institute for Cancer Immunotherapy in San Francisco to create universal CAR-T therapies designed to treat multiple cancer types based on Xyphos’ convertibleCAR platform. The collaboration, whose value was not disclosed, began with an initial research phase, during which the Parker Institute and Xyphos agreed to work together on building and evaluating CAR-T cell product candidates against a variety of cancer cell surface targets.

“The innovative technology in development at Xyphos fits perfectly in advancing our immuno-oncology strategy to create and deliver value for patients. Combining this technology with our capabilities in cell therapy that we have been working on so far, we can create next-generation high-function cells and maximize the value of our technology,” added Astellas’ president and CEO Kenji Yasukawa.

Astellas paid Xyphos $120 million upon closing of the acquisition—at which time it became a wholly-owned subsidiary of Astellas—and agreed to make payments tied to achieving future development milestones, raising the total value of the deal to a total potential $665 million.

Astellas said in its statement that the financial impact of the Xyphos deal would be “limited,” but furnished no details.

“We look forward to working with Xyphos’ superb team to advance and expand their clinical development programs to bring their novel therapeutics to patients,” Yasukawa added.

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