Incyte and Agenus said today they will develop and commercialize cancer immunotherapeutics by using the latter’s Retrocyte Display™ antibody discovery platform.

The deal raises both companies’ stakes in the promising category of oncology treatments, which has seen a growing number of players, and could generate as much as $60 million in short-term cash for Agenus, not to mention up to $310 million in potential milestone payments, plus millions more in royalties and shares of profits.

The companies said they will initially focus on developing checkpoint modulator antibodies directed against four genes—Glucocorticoid-induced TNFR-related gene (GITR), OX40 (also called CD134), LAG-3 and TIM-3—with the first clinical trials expected to be launched in 2016.

“This alliance with Agenus adds therapeutic antibody capabilities to our proven small molecule discovery expertise, significantly expands the landscape of potential immuno-oncology targets available to us, and strengthens our ability to identify and advance novel therapeutic combinations,” Hervé Hoppenot, Incyte’s president and CEO, said in a statement.

Incyte has agreed to pay Agenus $25 million upfront, and invest another $35 million in Agenus by purchasing about 7.76 million new shares of that company’s common stock at $4.51 per share.

Agenus and Incyte said they will split 50:50 all costs and profits for the GITR and OX40 antibody programs, with Agenus eligible for potential milestone payments of up to $20 million per profit-share product.

The TIM-3 and LAG-3 programs are royalty-bearing programs to be funded by Incyte, with Agenus eligible for up to $155 million each program in development, regulatory, and commercial milestones and royalties.

Also, Agenus is eligible for tiered royalties on global net sales of the royalty-bearing products ranging from mid-single to low-double digit rates. Those royalties could be higher if Agenus uses its right under the agreement to fund 30% of development costs for the royalty-bearing products.

Agenus and Incyte also hold an option to jointly nominate and pursue additional targets under their multiyear collaboration. For products created through any additional programs beyond the initial four, Agenus may designate them as profit-share, entitling the company to receive up to $20 million in future contingent development milestones.

The deal is subject to expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Retrocyte Display is a cell-displayed expression platform designed to enable a diverse library (>1×109) of human immunoglobulin (IgG) molecules to be displayed on the surface of B-lineage cells. The platform is designed to permit rapid generation of fully human and humanized therapeutic antibodies with high affinity and target specificity.

The Incyte-Agenus collaboration is the latest cancer immunotherapy effort by both companies. Last year Incyte announced the launch of three Phase I/II studies of immunotherapy combinations, joining with:

Agenus launched its own collaboration with Merck last year, with the companies agreeing to use the Retrocyte Display platform to discover and develop therapeutic antibodies for cancer against two undisclosed Merck checkpoint inhibitor targets. That deal could net Agenus more than $100 million.








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