It’s been a topsy-turvy few years for Infinity Pharmaceuticals. The Cambridge, MA-based company is well behind a few others, whose rival blood cancer drugs that have already made it to market, and Infinity has seen its shares rise and fall as investors have wondered whether its own prospect—known as duvelisib, or IPI-145—can stand out.
Pharma giant AbbVie, however, appears to believe it has a shot.
Today, Infinity (NASDAQ: [[ticker:INFI]]) has announced a big deal with AbbVie (NYSE: [[ticker:ABBV]]), which has agreed to shell out as much as $805 million to help the Massachusetts biotech get its drug through clinical development.
AbbVie will pay Infinity $275 million up front to grab rights to duvelisib, and has attached another $530 million in potential milestones to the deal. In return—assuming duvelisib makes it through clinical development and wins FDA approval—the two companies will co-commercialize duvelisib and share U.S. profits. Outside the U.S., AbbVie will own rights to the drug and will cover commercialization costs, with Infinity getting royalties on net sales ranging from 23.5 percent to 30.5 percent.
Inifinity will fund the trials it conducts, while the two companies will equally share the costs in the trials run by AbbVie. The two aim to run several mid- and late-stage trials testing duvelisib over the next several years in a variety of blood cancers. Duvelisib is currently in Phase 3 testing for patients with relapsed/refractory chronic lymphocytic leukemia (CLL), with another Phase 3 study testing duvelisib in tandem with rituximab (Rituxan) in follicular lymphoma expected to begin later this year. Infinity is also running a Phase 1 trial for duvelisib in patients with other advanced blood cancers as well.
Wall Street is cheering the news this morning. Infinity shares are up more than 40 percent in pre-market trading.
Duvelisib is one of several so-called PI3 kinase inhibitors, one of the hottest fields in biology for many years now. Targets in the PI3 kinase pathway are implicated in a bunch of important molecular functions, like cell survival and proliferation. The first generation of PI3 kinase drugs blocked the whole pathway, leading to a number of unwanted side effects, but more recent drugs, like Gilead Sciences’ idelalisib, and Infinity’s duvelisib, were developed more selectively—to hit certain variations of PI3 kinase instead.
That strategy, as well as a number of other advances, has led to significant progress in treating blood cancers like CLL. Sunnyvale, CA-based Pharmacyclics (NASDAQ: [[ticker:PCYC]]), for instance, won FDA approval earlier this year of a drug called ibrutinib (Imbruvica) that binds to a different molecular target called bruton’s tyrosine kinase. Ibrutinib has since gone on to become a massive-selling drug. Foster City, CA-based Gilead (NASDAQ: [[ticker:GILD]]) followed with an FDA nod for idelalisib (Zydelig) in CLL in July. Even AbbVie has a competitor looming dubbed ABT-199.
Infinity’s biggest problem has been trying to stand out in the crowd, and the result has been a roller coaster on Wall Street. Shares were as low as $5.98 apiece in 2012, then climbed to more than $35 in early 2012, before rolling back downhill as Gilead and Pharmacyclics’ drugs have made it through clinical development first, with nothing seemingly giving duvelisib a distinct edge. Shares closed Tuesday at just $10.92.
While it’s unclear at this point just where Infinity’s drug will fit into the crowded field, AbbVie is showing today that it believes duvelisib will find a niche.
“We believe that duvelisib is a very promising investigational treatment based on clinical data showing activity in a broad range of blood cancers,” said AbbVie executive vice president and chief scientific officer Michael Severino. “The addition of duvelisib will complement AbbVie’s emerging oncology pipeline and expand our research into combination therapies to generate improved outcomes for cancer patients. We look forward to working with Infinity to bring duvelisib to patients worldwide.”
RBC Capital Markets analyst Michael Yee added in a note to investors this morning that the AbbVie deal puts “a stamp of validation” on Infinity.
Infinity first acquired duvelisib by licensing the drug from San Diego, CA-based Intellikline, which was acquired by Takeda in 2011. Infinity has an obligation to pay part of its royalty stream to Takeda as a result of the deal.
Infinity will hold a conference call later this morning discussing the deal.
