Lycera said today Celgene will license its portfolio of RORgamma agonists to develop new cancer immunotherapies, and continue developing Lycera’s lead drug candidate, a Phase I compound for inflammatory bowel disease (IBD).

The deal gives Celgene the option to acquire Lycera, which stands to gain up to $105 million-plus from the collaboration.

The companies envision new compounds that target RORgamma, a master control switch of immune system activation, as potential treatments for a broad range of cancers. RORgamma activist compounds have shown promise in ex vivo treatment against cancer, enhancing the therapeutic benefit of adoptive T-cell therapy by improving both immune cell persistence and activation, the companies said.

Celgene and Lycera will also work to further the development of Lycera's lead program, LYC-30937, an oral gut-directed ATPase modulator now in early-stage clinical studies. LYC-30937 is designed to treat IBD without global immune suppression. Lycera will also continue to advance its other programs including a Rho-associated protein kinase 2 (ROCK2) inhibitor.

Under their exclusive strategic collaboration, Celgene agreed to pay Lycera $82.5 million in upfront cash payment, in return for an exclusive option to license Lycera's portfolio of ex vivo RORgamma agonist compounds. Lycera could also receive an additional $22.5 million in short-term payments associated with the ex vivo licensing option rights.

Celgene’s option to acquire Lycera can be exercised upon the option period ending, or Lycera achieving clinical milestones. During the option period, Lycera will retain full control of its R&D programs. Should Celgene exercise its option to acquire Lycera, shareholders will also be eligible to receive future success-based milestones.

“Celgene made clear that they valued both our world class team and scientific excellence. This investment and strategic collaboration will allow our company to continue to capitalize on the productive research and development pipeline we have established,” Lycera President and CEO Paul Sekhri said in a statement.

Lycera was founded in 2006 based on an initial scientific platform licensed from the University of Michigan. Lead investors in Lycera include InterWest Partners, ARCH Venture Partners, Clarus Ventures, and EDF Ventures.

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