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Epizyme Extends Celgene Cancer Deal for $10M Upfront

Xconomy Boston — 

Only three years after Celgene and Epizyme last inked a research collaboration deal, the partners are back at it.

Celgene has agreed to pay Epizyme $10 million upfront and as much as $610 million in milestones for the option to license three drug targets Epizyme (NASDAQ: EPZM) is developing, which use its method of inhibiting enzymes called histone methyltransferases, or HMTs. Those enzymes can suffer from genetic alterations and potentially cause cancer, the company says.

Epizyme, a Cambridge, MA-based company founded in 2007, makes small molecules to inhibit the 96 enzymes classified as HMTs, and has developed chemical matter targeting 17 of them, the company says. Celgene will have the option to license each of the three targets in this new deal whenever Epizyme files an investigational new drug application for one, Epizyme said in a statement Thursday. Two of the three licenses are for global rights, and a third is for rights outside the U.S.

Until then, Epizyme is responsible for funding clinical development of each candidate through Phase 1. The company can earn more if Celgene does pick up its option to license the drugs: up to $75 million for development and licensing; $365 million in regulatory milestones; and as much as $170 million based on sales.

Summit, NJ-based Celgene also agreed to pay “low double-digit” royalties on sales, perhaps, if the drug is commercialized.

The deal follows a 2012 agreement between the companies, in which Celgene delivered $90 million upfront and as much as $160 million in milestones for a three-year license on some of Epizyme’s programs. The specific focus was on mixed lineage leukemia, a blood cancer that occurs in both children and adults. Epizyme’s therapy, EPZ-5676, or pinometostat, attempts to inhibit the gene DOT1L, which can cause the growth of leukemia cells.

Celgene delivered on the agreement in 2014, when it paid $25 million to Epizyme after pinometostat met a proof-of-concept milestone, according to chief financial officer Andy Singer. That deal, which provides Celgene with a license to the drug outside the U.S., remains intact after the new agreement with Celgene. Pinometostat is in Phase 1 trials.

Epizyme noted that this new deal removed one aspect of its agreement with Celgene. Celgene no longer has the right of first negotiation about a business combination with Epizyme, the company said.

Epizyme has multiple other partnerships, including one with GlaxoSmithKline (NYSE: GSK) that could earn the company $18 million in preclinical milestones, Singer wrote in an e-mail. That deal is also based on developing and commercializing small molecule inhibitors of HMTs.

Epizyme’s other candidate progressing through clinical trials, tazemetostat or EPZ-6438, attempts to inhibit the EZH2 enzyme, which can cause tumor growth, to help threat patients with non-Hodgkin lymphoma or INI1-deficient solid tumors. It is licensed to Japanese pharmaceutical company Eisai and is in Phase 2 clinical trials.

Epizyme’s existing funding should give it enough cash to operate through the second quarter of 2017, Epizyme said in a statement. Epizyme raised $79.8 million in an initial public offering in June 2013.