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2021 Q3 Report: Global Trends in Biopharma Transactions

On October 7, 2021 Locust Walk reported that deal team members compile key statistics and trends on strategic transactions and financings (Press release, Locust Walk Partners, OCT 7, 2021, View Source;utm_medium=rss&utm_campaign=2021-q3-report-global-trends-in-biopharma-transactions [SID1234591035]). Our 2021 Q3 Report: Global Trends in Biopharma Transactions applies the latest data to analyze current activities in the life sciences deal landscape.

In this report you can find an overview and analysis of the following across the biopharma market in the US, Europe, and Asia (Japan and China):

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Key performance indicators for the life science market
IPO and private financing activity and performance
Deal activity for strategic partnership and M&A
A look ahead and our predictions of the future

United States

Biotech indices declined in Q3 2021 (-1.2% NBI, -4.0% BTK), compared to the 0.2% gains of the benchmark S&P 500 this quarter
The US biopharma IPO momentum slowed in Q3 in terms of total aggregate deal value but with slightly higher deal volume compared to Q2
The healthcare SPAC IPO market which began to cool down in Q2 2021 continued its cooling in Q3, with the volume and aggregate deal value of biotech dedicated SPACs falling to near pre-pandemic levels
Despite the apparent slowdown from the previous quarter, public and private financing activity remains strong relative to historical standards
Biopharma companies from the IPO Classes of 2019, 2020, and 2021, on average, all underperformed the major biotech indices this quarter
Strong deal flow among licensing deals demonstrated sustained interest in strategic licensing transactions. Additionally, a dramatic increase in M&A average deal size revealed that the market values clinical-stage biotechnology companies

Europe

The steadily impressive increases in private investment into EU biotech since Q1 2020 has taken a break, raising just over $1B in Q3 2021, a fall of ~35% after the record-setting of ~$1.6B raised in Q2 2021 but still higher than Q3 in 2020 or 2019
Public financings slowed down significantly in Q3 compared to the last two quarters. There were only five small IPOs, all in home exchanges; no biopharmas have crossed the pond this quarter to go public on the US markets
European M&A activity stays consistent in terms of deal volume but total deal value back towards levels seen in Q1 2020
Notably, Q3 EU biopharma licensing agreements surpassed $8.1B in aggregate value, beating the impressive $7.8B of Q2. The deal activity in this quarter was again driven by a strong focus on immuno-oncology, but also by the revival of CNS through three significant deals

Japan

The biotech sector in Q3 2021 fell -13.8% with noticeable drops end of July while the pharma sector stayed flat, and overall growth of the two sectors since the beginning of 2020 is underperforming market
All 5 in-licensing deals in Q3 2021 involved over $200M in deal size, and are split between either phase 3 assets or discovery stage transactions
Following a strong quarter in venture financing in Q2 2021, the trend continues in Q3 which featured 9 deals with aggregate value of $50M; volume and value in 9 months of 2021 already beat the full year record in 2020

China

Average share price of top Chinese pharma dropped by 14.1% due to speculations that the tightening of regulation for IT companies may also happen in the health care sector, while the SSE Composite Index was stable
In-licensing deal volume and value in Q3 2021 outperform Q2 the previous year: 21 in-licensing deals closed including 16 deals with over $50M in total deal size and 15 with over $5M upfront payment
Out-licensing activity was slow in Q3, but with large deal size: RemeGen’s $2.6B deal for ADC program to Seagen
Venture financing for biotech companies continue to exceed previous levels, as 35 companies raised capital for an aggregate total of $2.4B in Q3 alone

Pyxis Announces Pricing of Upsized Initial Public Offering

On October 7, 2021 Pyxis Oncology, Inc. (Nasdaq: PYXS), a preclinical oncology company focused on developing an arsenal of next-generation therapeutics to target difficult-to-treat cancers and improve quality of life for patients, reported the pricing of its upsized initial public offering of 10,500,000 shares of common stock at an initial public offering price of $16.00 per share (Press release, Pyxis Oncology, OCT 7, 2021, View Source [SID1234591034]). All of the shares are being offered by Pyxis. The gross proceeds from the offering, before deducting underwriting discounts and commissions and other offering expenses payable by Pyxis, are expected to be $168.0 million. The shares are expected to begin trading on the Nasdaq Global Select Market on October 8, 2021 under the ticker symbol "PYXS." The offering is expected to close on October 13, 2021, subject to the satisfaction of customary closing conditions. In addition, Pyxis has granted the underwriters a 30-day option to purchase up to an additional 1,575,000 shares of common stock at the initial public offering price, less underwriting discounts and commissions.

BofA Securities, Jefferies, Credit Suisse and William Blair are acting as joint book-running managers for the offering. LifeSci Capital is also acting as an underwriter for the offering.

Registration statements relating to the offering have been filed with the Securities and Exchange Commission and became effective on October 7, 2021. The offering will be made only by means of a prospectus. When available, copies of the final prospectus may be obtained from BofA Securities, NC1-004-03-43, 200 North College Street, 3rd Floor, Charlotte, North Carolina 28255-0001, Attention: Prospectus Department, or by email at [email protected]; from Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, 2nd Floor, New York, NY 10022, or by email at [email protected] or by telephone at 877-821-7388; from Credit Suisse Securities (USA) LLC, Attn: Prospectus Department, 6933 Louis 31 Stephens Drive, Morrisville, North Carolina 27560, Telephone:1-800-221-1037, or by email at [email protected]; or from William Blair, Attention: Prospectus Department, 150 North Riverside Plaza, Chicago, IL 60606, or by telephone at(800) 621-0687 or by email at [email protected].

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any offer or sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

Zai Lab Says HER2 Drug Meets Endpoints in Bridging Trial

On October 7, 2021 Shanghai’s Zai Lab reported its in-licensed HER2 drug met its endpoints in patients with previously treated HER2+ breast cancer. Zai acquired China rights to margetuximab as part of a $165 million, three-drug deal from MacroGenics in 2018 (Press release, Zai Laboratory, OCT 7, 2021, View Source [SID1234591033]). MacroGenics was approved to launch margetuximab in the US last year in combination with chemotherapy as a third-line treatment for HER2 positive breast cancer. Zai plans to file a BFA in China before the end of the year.

Relay Therapeutics Announces Preclinical Data that Support RLY-2608 as the First Known Allosteric Pan-Mutant Selective Inhibitor of PI3Kα

On October 7, 2021 Relay Therapeutics, Inc. (Nasdaq: RLAY), a clinical-stage precision medicine company transforming the drug discovery process by combining leading-edge computational and experimental technologies, reported that preclinical data at the virtual AACR (Free AACR Whitepaper)-NCI-EORTC Molecular Targets Conference for RLY-2608, the first allosteric, pan-mutant (H1047X, E542X and E545X) and isoform-selective PI3Kα inhibitor (Press release, Relay Therapeutics, OCT 7, 2021, View Source [SID1234591018]).

The data presented at the conference show that in preclinical models, RLY-2608 preferentially binds mutant PI3Kα at a novel allosteric site discovered by the Dynamo platform. Scientists at Relay Therapeutics solved the full-length structure of PI3Kα, performed long time-scale molecular dynamic simulations to elucidate differences in motion between wild-type (WT) and mutant PI3Kα, and leveraged these insights to enable the design of RLY-2608. In biochemical and cellular assays, RLY-2608 inhibited the three major classes of PI3Kα oncogenic mutations (H1047X, E542X and E545X) while sparing WT PI3Kα. The data further suggest that RLY-2608 is also highly selective against other PI3K family members and exquisitely selective across the kinome. The data suggest that projected clinically relevant doses of RLY-2608 achieved tumor regression in PIK3CA mutant in vivo xenograft models representing H1047R and E545K mutations with significantly reduced impact on glucose metabolism compared to non-mutant selective active site inhibitors. In higher species, dosing of RLY-2608 resulted in exposures exceeding 90% inhibition of mutant PI3Kα in cells without resulting in elevated glucose levels or histopathological changes associated with dysregulation of glucose metabolism that are seen with non-mutant selective inhibitors.

These results support advancement of RLY-2608 into clinical development as a differentiated mechanism of mutant PI3Kα inhibition with the first-in-human study anticipated to start in the first half of 2022. RLY-2608 is the lead program of multiple preclinical efforts at Relay Therapeutics to discover and develop mutant selective inhibitors of PI3Kα.

RLY-2608 has the potential to address over 100,000 patients per year in the United States, one of the largest patient populations for a precision oncology medicine. Selectivity for all three mutation hot spots (H1047X, E542X and E545X) has the potential to effectively double the addressable patient population compared to selectivity for only H1047X.

"The data shared today provide another proof point that we’re developing what we believe to be the first known pan-mutant selective allosteric inhibitor of PI3Kα," said Don Bergstrom, M.D., Ph.D., executive vice president of R&D at Relay Therapeutics. "We believe RLY-2608 has the potential to address a significant unmet medical need in a large population and have validated our approach for developing mutant selective inhibitors of PI3Kα. RLY-2608 is only the start of our PI3Kα efforts, and by leveraging our Dynamo platform, we plan to build a franchise around this target for the long-term."

Conference Call Information
Relay Therapeutics will host a live webcast and conference call tomorrow, October 8, beginning at 12:30 pm E.T. to discuss the results of this presentation and the RLY-4008 presentation tomorrow. To access the live call, please dial (833) 540-1168 (domestic) or (929) 517-0359 (international) and refer to conference ID 4657916. A webcast of the conference call will be available under "News and Presentations" in the Media & Investors section of Relay Therapeutics’ website at View Source The archived webcast will be available on Relay Therapeutics’ website approximately two hours after the conference call and will be available for 30 days following the call.

The data presentation from the AACR (Free AACR Whitepaper)-NCI-EORTC Molecular Targets Conference is also available on the Relay Therapeutics website under "Publications/Presentations" near the bottom of View Source

About RLY-2608
RLY-2608 is the lead program of multiple preclinical efforts to discover and develop mutant selective inhibitors of PI3Kα. PI3Kα is the most frequently mutated kinase in all cancers, with oncogenic mutations detected in about 13% of patients with solid tumors. Traditionally, the development of PI3Kα inhibitors has focused on the active, or orthosteric, site. The therapeutic index of orthosteric inhibitors is limited by the lack of clinically meaningful selectivity for mutant versus WT PI3Kα and off-isoform activity. Toxicity related to inhibition of WT PI3Kα and other PI3K isoforms results in sub-optimal inhibition of mutant PI3Kα with reductions in dose intensity and frequent discontinuation. The Dynamo platform enabled the discovery of RLY-2608, the first known allosteric, pan-mutant (H1047X, E542X and E545X), and isoform-selective PI3Kα inhibitor designed to overcome these limitations. Relay Therapeutics solved the full-length cryo-EM structure of PI3Kα, performed computational long time-scale molecular dynamic simulations to elucidate conformational differences between WT and mutant PI3Kα, and leveraged these insights to support the design of RLY-2608. RLY-2608 is on path to initiate a first-in-human clinical trial in the first half of 2022, subject to submission of an investigational new drug application and acceptance by the FDA.

Allogene clinical trial update

On October 7, 2021, Allogene Therapeutics, Inc. ("Allogene") reported that, following a report of a chromosomal abnormality in ALLO-501A chimeric antigen receptor ("CAR") T cells in a patient treated in its ALPHA2 study, the U.S. Food and Drug Administration ("FDA") has placed a hold on Allogene’s cli nical trials (Press release, Cellectis, OCT 7, 2021, View Source [SID1234591014]).

The clinical hold follows Allogene’s notification to the FDA of a chromosomal abnormality in an ALPHA2 study patient which was detected in a bone marrow biopsy undertaken to assess pancytopenia (low blood counts). Allogene reported that an investigation is underway to further characterize the observed abnormality, including any clinical relevance, evidence of clonal expansion or potential relationship to gene editing. Allogene reported that it expects to provide additional updates in the coming weeks following consultation with the FDA. The FDA continues to actively review the end of Phase 1 materials submitted by Allogene in anticipation for an ALLO-501A pivotal Phase 2 trial.

The single case involves a patient with Stage IV transformed follicular lymphoma and a type of genetic rearrangement, known as c-myc rearrangement, whose cancer was refractory to two prior lines of immune-chemotherapy and additional radiation therapy. The patient could not receive an autologous anti-CD19 CAR T cell therapy due to manufacturing failure associated with inadequate expansion of autologous CAR T cells.

Following infusion of ALLO-501A, the patient experienced Grade 1 cytokine release syndrome and Grade 2 immune effector cell-associated neurotoxicity syndrome, which required a course of high dose steroid therapy. The patient subsequently developed progressive pancytopenia and a bone marrow biopsy showed aplastic anemia and the presence of ALLO-501A CAR T cells with the chromosomal abnormality. Early translational data showed that the CAR T cells expanded, peaking on Day 28, and undergoing contraction thereafter. The patient had a partial response to ALLO-501A and subsequently underwent allogeneic stem cell transplantation. Prolonged cytopenia requiring rescue stem cell transplantation has been reported in autologous CAR T therapies.