Pharmaceutical maker Novartis is broadening its footprint in the cancer drug treatment market. The Swiss company announced plans Monday to enter a multiyear partnership with Berkeley, Calif.-based Aduro Biotech, valued at $750 million, to develop next-generation immunotherapies against the disease.
The terms of the agreement will see Novartis pay $200 million upfront to Aduro with an additional $500 million to be paid if development milestones are met.
In addition, Novartis has agreed to make a $25 million investment in Aduro for a 2.7% equity share in the firm, with a promise to pay an additional $25 million investment at a later date.
The collaboration will focus on the development of treatments designed to activate the Stimulator of Interferon Genes, or STING, receptors, which have been found to generate an effective immune response against infectious organisms.
“Immunotherapy is one of the exciting frontiers in oncology today,” Mark Fishman, president of the Novartis Institutes for BioMedical Research, said in a released statement. “STING agonists have the potential to fully activate the immune system to attack a broader range of tumors.”
Under the agreement, Aduro will lead commercialization activities and will book sales in the U.S. for any products developed, with Novartis leading commercialization activities internationally. The companies will share profits, if any, in the U.S., Japan and major European countries, with Novartis paying Aduro royalties for any sales in the rest of the world.
“We are extremely pleased to enter into this relationship with Novartis as their strong commitment and spirit of collaboration was evident early in our conversations,” Stephen Isaacs, chairman, president and CEO of Aduro, said in a released statement.
In March, Novartis won FDA approval to market its cancer drug Zarxio, making it the first “biosimilar” to be sold in the U.S. The drug was designed as a cheaper alternative to Amgen's biologic medication Neupogen, with experts estimating it could be sold at a discount of up to 35% of Neupogen's current price.