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Calithera soars as Incyte signs collaboration deal

Incyte is interested in Calithera's technology that stmulates the immune system to combat cancer
Cancer cells
Incyte and Calithera will jointly conduct and co-fund development of CB-1158

Calithera Biosciences Inc (NASDAQ:CALA) soared as it pocketed a US$45mln up-front payment from much larger sector peer Incyte Corporation (NASDAQ:INCY).

Incyte is to also make an US$8mln investment into Calithera, buying shares at US$4.65 a pop, as part of a collaboration agreement that will see the companies work together to develop and commercialize Calithera’s CB-1158 small molecule arginase inhibitor.

Incyte will receive worldwide rights to develop and commercialize CB-1158 in haematology and oncology and Calithera will retain certain rights to research, develop and commercialize certain other arginase inhibitors in certain orphan indications.

Arginase is an enzyme produced by immunosuppressive myeloid cells, including myeloid-derived suppressor cells (MDSCs) and neutrophils, which prevents T-cell and natural killer (NK) cell activation in tumors.

“In this strategic partnership with Incyte, CB-1158 is expected to be evaluated in multiple trials of novel therapeutic combinations, accelerating its development across haematological and oncology indications,” said Susan Molineaux, Ph.D., Calithera’s chief executive officer.

Shares in Incyte eased 2.4% to US$118.79, in contrast to Calithera, which shot up 50.6% to US$6.92.

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