Alliance Trends

Recent Trends in Oncology Alliances

Mark Edwards Mark Edwards
Alliances in oncology have continued the momentum engendered by checkpoint inhibitors and immuno-oncology advances of the past five years. Recent broadening of “druggable” cancer targets, combined with toxicity-sparing technologies, have opened an unprecedented golden era for biopharma oncology alliances.
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Innovative approaches to the diagnosis, treatment and prevention of cancer have been the cornerstone of biopharma alliances for decades. While efforts to combat the COVID-19 pandemic have eclipsed all other activity in recent months, there has been sustained interest by investors and partners in novel targets, technologies and compounds in this therapeutic area. For example, over the past two weeks, two oncology companies completed IPOs (Repare Therapeutics & Forma Therapeutics) and six more IPO-hopefuls are currently in registration (Greenwich, Fusion, Poseida, Nkarta, Relay and iTeos).

Near the end of 2018 we took a close look at biopharma’s oncology alliances. Specifically, we compared the deal economics of immuno-oncology (“IO Alliances”) versus other cancer compound alliances (“Non-IO Alliances”). Here’s a link our earlier analysis. Due to the eye-popping economics of certain recent cancer deals (e.g. IDEAYA/GSK and Daiichi/AZ), as well as the sheer volume of alliances commenced over the past 18 months, we thought it useful to revisit this field.

Methodology

For purposes of this analysis, we looked at cancer agreements commenced since January 2019 involving a license to oncology targets, compounds or diagnostics. We eliminated acquisitions, asset purchases, simple supply agreements and collaborations not involving a license or option to license. We found 302 such agreements, all of which are listed in the Recent Cancer Alliances spreadsheet accompanying this article. We also assembled Deal Snapshots of 40 cancer deals with substantial economics disclosed on the basis of some combination of (1) SEC-filed contracts, (2) SEC-filed quarterly or annual financial notes, or (3) press releases, all of which may be downloaded here. In each instance, we noted the following agreement terms and collateral information where available:

  • Deal Size – Summation of all upfront, R&D and milestone payments, including any initial & contingent equity or loan payments, to be paid to the R&D Licensor (payment amounts by type, plus financial term explanations, are at the far right of the spreadsheets)
  • Maximum Share – The highest percentage of net sales or profits potentially to be paid to the R&D Licensor
  • Stage at Signing – One or more of the following: Discovery, Lead Molecule, Preclinical, Phase I, Phase II, Phase III, Filed, Approved, Diagnostic, Reagent, Device, Formulation, Orphan Indication
  • Disease/Indication – Primary disease focus of the agreement, including named indications
  • Technology/Sub-technology – Primary technology focus of the agreement, including any sub-technology
  • Compound Name – The most advanced compound included in the agreement
  • Mechanism of Action (MOA) Category – Class of compound (e.g. receptor, kinase, IO, enzyme inhibitor)
  • Molecular Target – Specific oncology target(s)
  • Drug Mode of Action – Basis of compound activity (e.g. agonist/antagonist, stimulant/inhibitor, modulator).

Subscribers to BiosciDB.com may also access the deal press release, SEC-filed quarterly or annual financial notes disclosures and/or SEC-filed contract(s) by following the “Web Link”.

Novel Targets & Synthetic Lethality Have Broadened Recent Cancer Deals

Historical oncology drug development has primarily focused on readily druggable targets, so-called “gain-of-function” targets such as EGFR. This is due to “loss-of-function” targets such as BRCA1 having been generally regarded as undruggable. However, recent advances in immuno-oncology, cell therapy, bioinformatics and synthetic lethality have led to a much broader set of approaches. Figure 1 shows the primary technology focus of recent cancer alliances. Monoclonals (including biosimilars) were the basis of 71 deals (29%), followed by 66 small molecule synthetics (27%, including screening deals involving synthetic lethality), and 38 cell therapies (16%). There were 45 recent cancer-associated diagnostic alliances (18%), plus 11 focused on bioinformatics (4%). Vaccines and gene therapy (including RNAi) made up the balance of recent cancer alliance technologies.

With respect to mechanism of action (MOA) categories, Figure 2 shows that IO Alliances (including immunotherapy) continue to be most common, with 53 new alliances (56%) since 2019. However, enzyme inhibitors, kinases and other targets have each contributed about 15% of recent deals, showing the breadth of newly druggable targets.

Two-thirds of Recent Alliances are Preclinical Stage or Earlier

With a proliferation of oncology targets, it’s no surprise that the majority of recent cancer deals have been early stage at signing. As shown in Figure 3, there were 103 discovery/lead stage alliances (42%) and 61 having a compound at preclinical stage (25%). In addition, even deals having a preclinical stage compound where often also oriented to discovery of additional targets. This was the case in the June 2020 IDEAYA/GlaxoSmithKline alliance, a snapshot for which is available here. For clinical stage alliances, 41 were in Phase I/II (17%) and 39 were in Phase III or later at signing (16%).

$68 billion in Aggregate Potential Deal Payments for Cancer Deals with Announced Terms

Figure 4 shows the total amount of potential deal payments to the R&D licensor by alliance stage at signing. Only 105 deals (44%) disclosed total deal size either at signing or in subsequent SEC filings of 10-Qs and/or annual reports, but these nonetheless amounted to almost $68 billion in deal payments. Early stage alliances were $37.7 billion (56%) of such aggregate payments, with discovery/lead stage deals being the largest single component.

To confirm the extent to which cancer deal economics have continued to advance recently, we compared the average and median deal payments by stage at signing for oncology alliances commenced since January 2019 versus IO Alliances from our earlier analysis. As shown in Figure 5, recent cancer deals have been obtaining substantially higher deal sizes across all stages at signing on both an average and median basis. Figure 6 has a breakdown of specific payment terms.

Conclusions

Alliances in oncology have continued the momentum engendered by the checkpoint inhibitors and immuno-oncology advances of the past five years. Recent broadening of “druggable” cancer targets, combined with toxicity-sparing technologies, have opened an unprecedented golden era for biopharma oncology alliances.