Checkmate Pharmaceuticals—an immune-oncology treatment developer emerging from stealth mode after closing on $20 million in series A financing—has secured an exclusive license from Cytos Biotechnology to its lead drug candidate CYT003, its virus-like particle (VLP) platform, and technology related to oligonucleotide synthesis, the companies said today.

The deal could generate up to $90 million-plus for Cytos, which indicated it is looking to help develop a cancer immunotherapy.

“We are excited about the potential of our immunologically active VLP platform in the field of immune-oncology and believe that Checkmate is well positioned to advance treatment options for patients with cancer,” Cytos Chairman and CEO Christian Itin, Ph.D., said in a Cytos statement.

CYT003 is a first-in-class, immune modulator that had been in clinical development as a potential new treatment for asthma. Cytos believed that CYT003-activated plasmacytoid dendritic cells (pDCs) would inhibit type 2 helper T (Th2) cells, which play a key role in the development of the most common form of the condition, allergic asthma.

However, CYT003 failed a Phase IIb trial last year by missing several endpoints, pushing the company into layoffs and liquidation. The company eliminated its debt earlier this year through a restructuring in which the company converted all bonds held by investors into equity shares and settled claims with the bondholders.

CYT003, a product derived from the cytosine-phosphate-guanosine (CpG) class of oligonucleotides, activates the immune system via Toll-like receptor 9 (TLR9). According to Checkmate, the TLR9 agonist CpG DNA has been the strongest at activating anti-tumor Cytolytic T Lymphocytes (CTLs) thus far.

Checkmate says it sees promise in fighting cancer through a combination of two mechanisms: CpG DNA to activate the CTL response and checkpoint inhibition to release the tumor’s braking mechanism against the immune system. The company asserts that CYT003 has the potential to improve efficacy outcomes and broaden the size of the populations that can benefit from checkpoint inhibitor therapies. CYT003 had demonstrated a good safety profile and evidence of immune activity in more than 700 patients treated to date, Checkmate noted.

CpG DNA was discovered in 1994 by Arthur M. Krieg, M.D., who is Checkmate’s founder and has been CEO since December 2014. Checkmate, a privately-held company based in Cambridge, MA, emerged from stealth mode today by announcing it has closed on $20 million in series A financing from Sofinnova Ventures and venBio.

Checkmate has worked to validate an approach that will combine the ability of CpG DNA to activate an anti-tumor T cell response with checkpoint inhibition to overcome a tumor’s ability to mute the immune response.

Cytos’ VLP platform is based on bacteriophage Q beta-derived (Qb) virus-like particles, with desired antigens capable via chemical linkers of being directionally conjugated to the VLP surface, and presented in a highly ordered fashion to B-cells.

“Our data indicate that CYT003 and the VLP technology platform will enhance the efficacy of checkpoint inhibitors such as anti-PD-1 and anti-PD-L1 antibodies, addressing a critical unmet therapeutic need in immuno-oncology and providing a better set of treatment options for patients with cancer,” Dr. Krieg said in a statement issued by Checkmate.

Cytos said it may receive up to $90 million tied to achieving development milestones, as well as up to double-digit royalties on net sales from successfully developed products.

Headquartered in Schlieren, Zurich, Switzerland, Cytos was founded in 1995 as a spinoff from the Swiss Federal Institute of Technology (ETH) in Zurich.

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