Development and commercialisation of CF33, a chimeric vaccinia poxvirus, will be funded through Imugene’s existing cash reserves and will include ex-Viralytics members as part of its project development team.
Imugene chief executive officer Leslie Chong said the company was delighted to licence such a promising next-generation oncolytic virus (OV) in a competitive marketplace, where big pharma companies are actively seeking OV technologies.
Oncolytic viruses are designed to both selectively kill tumours cells and activate the immune system against cancer cells, with the potential to improve clinical response and survival.
The viruses have the potential to transform oncology by directly causing tumour cell death and also by delivering a potent payload in a targeted fashion that activates the immune system.
Chong continued: “CF33 comes with robust intellectual property and long patent life, compelling pre-clinical efficacy and safety and is anticipated to enter a phase-one clinical trial in 2020.
“The opportunity to separately engage with members of the ex-Viralytics team through Vaxinia was cogent for immune.
“[It] bring to Imugene senior executives with direct involvement in two of the largest OV transaction in biotech history being Amgen’s acquisition of Biovex for US$950 million and Merck’s acquisition of Viralytics for A$502 million.”
The drug was initially developed at Los Angeles-based City of Hope, a world-renowned independent research and treatment centre for cancer, diabetes and other life-threatening diseases.
In consideration for the exclusive licence, City of Hope will receive from Imugene licence fees comprising an upfront, annual maintenance fee creditable against future royalty payments.
The company will also pay performance-based consideration linked to achieving certain milestones and commercial outcomes, as well as net sales-based royalty payments and sub-licencing fees.
As part of the transaction, Imugene entered into a binding agreement to acquire 100% of Vaxinia, of which Imugene executive chairman Paul Hopper is major shareholder.
The transaction includes an up-front cash payment of A$462,500 and the issue of ordinary fully paid Imugene shares valued at A$1.619 million, based on the seven-day volume weighted average price.
The decision to acquire Vaxinia was made by Imugene’s independent directors, with Hopper recused from the process given he is a beneficiary of the transaction.
Shareholders of Vaxinia include, along with Hopper, City of Hope chair of surgery Professor Yuman Fong, the inventor of CF33, and an ex-Viralytics executive.
They will be eligible for further payments in equity on the achievement of performance-related milestones.
These milestones will be further detailed in the company’s notice to meeting and will include granting of investigational new drug status by the Federal Drug Administration (FDA), dosing the first patient in a phase-one clinical trial and the phase-one clinical trial demonstrating safety.