Bristol Myers Strikes $1.6 Billion Pact for New Cancer Drug

Bristol Myers Squibb Co. has agreed to pay Agenus Inc. as much as $1.56 billion for the rights to a new kind of experimental drug that uses the body’s immune system to combat cancer.

Under the terms of the deal, Agenus will receive $200 million upfront and could net as much as $1.36 billion in additional payments if the treatment, called AGEN1777, meets certain development, regulatory and commercial targets, the companies said on Tuesday. The agreement is Agenus’s largest-ever licensing pact for a single program.

Agenus shares gained 34% to $4.36 in premarket trading in New York, while shares of Bristol Myers declined 0.1%.

Cancer-fighting immunotherapy drugs have generated billions in sales for pharmaceutical giants. Blockbusters like Merck & Co.’s Keytruda and Bristol Myers’s Opdivo are used to treat a wide range of tumors, including advanced non-small cell lung cancer, melanoma and kidney cancer.

Both those medicines are designed to inhibit a so-called checkpoint protein called PD-1. Agenus’s treatment targets a different checkpoint known as TIGIT. Researchers say that such therapies could complement and enhance drugs like Keytruda and Opdivo when used as combination therapies.

That could boost the older drugs as their sales mature and increase demand for immunotherapy more broadly. Anti-TIGIT medicines could help expand the $28 billion checkpoint-inhibitor market by $10 billion, according to an April report by Mizuho.

More than a dozen combination regimens using such therapies are now being studied. Roche Holding AG has tested its cancer drug Tecentriq in combination with its anti-TIGIT agent tiragolumab, and Merck has studied Keytruda combined with its vibostolimab.

Other TIGIT inhibitors have sparked interest from large drugmakers. Gilead Sciences Inc., which has also reached licensing deals with Agenus for up to five immune therapies, has been scanning the field. It struck a similar deal with Arcus Biosciences Inc. last year and has amassed a nearly 20% stake in the biotechnology company.

Many Suitors

Though Agenus’s medicine isn’t the furthest along in clinical trials, the founder of the 26-year-old company said its preclinical data attracted large cancer-focused suitors.

Garo Armen, chief executive officer of Agenus, said in an interview that the company’s treatment could “break the barrier of cancers that are not well-served today, and allow for another major step” in immunotherapy. He said he sees it as a viable treatment for when PD-1 inhibitors or other anti-TIGIT medicines have proved ineffective.

The deal with Bristol Myers will allow Agenus to focus on the rest of its cancer pipeline.

“It’s imperative for us to reduce risk,” Armen said. “We are going to take some molecules forward on our own, and build our own immuno-oncology business.”

Agenus, based in Lexington, Massachusetts, will retain options to test AGEN1777 in trials, including in combination with its other experimental products, and to co-promote it in the U.S. should it be approved. The company plans to ask U.S. regulators for permission to study the drug in humans this quarter, and move it into clinical trials later this year.

Bristol-Myers is also testing its own TIGIT inhibitor, called BMS-986207, in early safety studies. It intends to advance research and development of AGEN1777 in high-priority tumor indications, including non-small cell lung cancer.

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