Synthorx is working to design new cytokine therapies for cancer using an “extended” genetic alphabet that could help avoid the shortcomings associated with earlier versions.
Now French biopharma Sanofi has struck a deal to add the startup to its oncology business in a transaction that values the company at about $2.5 billion. The move is the first acquisition the company has announced since CEO Paul Hudson joined the Paris-headquartered company Sept. 1.
Sanofi agreed to pay $68 per outstanding share of Synthorx (NASDAQ: [[ticker:THOR]]), a 172 percent premium over its Friday closing stock price of $25.03 apiece. Synthorx’s stock shot to $67.71 per share Monday. Hudson, who previously headed pharma at Novartis (NYSE: [[ticker:NVS]]), said in a prepared statement that the deal would bolster Sanofi’s immuno-oncology pipeline.
Synthorx’s lead drug candidate, THOR-707, is an engineered form of interleukin-2 (IL-2), a cytokine that has been used as a cancer drug for more than 25 years. The technology Synthorx uses to develop the molecules it aims to turn into cancer drugs came from the lab of company founder Floyd Romesberg at The Scripps Research Institute, which created a novel synthetic DNA base pair that could be inserted into E. coli bacteria to create synthetic amino acids. Synthorx used the tech to tweak IL-2 to make it more precise and extend its half-life.
High doses of IL-2 can cause dangerous side effects, including vascular leak syndrome (VLS), a condition in which plasma seeps from blood vessels. Earlier this year, Synthorx started a Phase 1/2 clinical trial of THOR-707, which was designed to increase patients’ levels of T cells that attack tumor cells without causing VLS.
The startup is also testing the drug in combination with other immunotherapies.
Like other biopharmas, Sanofi is seeking ways to combine its immunotherapies with other drugs in hopes of increasing their effectiveness. John Reed, Sanofi’s head of R&D, said THOR-707 could “become a foundation of the next generation of immuno-oncology combination therapies.” The company plans to test the Synthorx molecules in combination with its drugs cemiplimab (Libtayo), isatuximab (Sarclisa), and early-stage immunotherapies, Reed statement said in a letter to Sanofi employees.
There is also potential for the optimized drugs, which the startup has dubbed Synthorins, to be used to treat autoimmune and inflammatory diseases as well as cancer, Reed said. Sanofi declined to make an executive available for an interview Monday.
Synthorx is based in La Jolla, CA, at COI Pharmaceuticals, a shared office space for startups backed by local VC firm Avalon Ventures. Avalon and Correlation Ventures, another San Diego firm, were its founding investors. The company went public one year ago, raising $131 million in an upsized IPO. The year prior, it raised $63 million from outside investors.
The deal—expected to close in the first quarter of 2020—caps off a big year for COI, which in recent months announced two other acquisitions.
In those deals, the teams remained with COI. Details weren’t available as to what this transaction means for Synthorx employees. President and CEO Laura Shawver (pictured) declined an interview request. But in a letter to Synthorx employees Reed wrote: “Upon closing, I look forward to welcoming you to the Sanofi family and overseeing a smooth transition for the Synthorx teams.”
In a letter to Sanofi employees, Reed said the company envisions opportunities to combine the Synthorx tech with nanobodies, a technology developed by Belgian company Ablynx for which Sanofi paid €3.9 billion ($4.3 billion) last year, in addition to other immunotherapies.
Other pharmas have also bet on improved versions of cytokine therapies for cancer. In February 2018, Bristol-Myers Squibb (NYSE: [[ticker:BMY]]) said it would pay $1.85 billion to split rights to NTKR-214, a cytokine treatment from San Francisco’s Nektar Therapeutics (NASDAQ: [[ticker:NKTR]]), which it is testing in combination with its drug nivolumab (Opdivo) in patients with metastatic melanoma.
In May 2018, Eli Lilly (NYSE: [[ticker:LLY]]) said it would pay $1.6 billion cash to acquire Armo BioSciences. At the time, its lead drug candidate, pegilodecakin, a form of IL-10, was in Phase 3 testing in combination with a common chemotherapy regimen in patients with metastatic pancreatic cancer. However, about 18 months later, Lilly announced the drug combo didn’t meet the goals of the study. The company continues to study the investigational drug as a treatment for other cancers.
