Effective checkpoint inhibitors facilitate immune cells’ ability to recognize and target tumors. But for some patients this approach to treating cancer doesn’t work. Pionyr Immunotherapeutics aims to help those people by developing antibody drugs that take a new approach toward boosting the body’s anti-tumor efforts.
Now, as Pionyr prepares to ask the FDA to clear its two most advanced programs to proceed into the clinic, Foster City, CA-based Gilead Sciences (NASDAQ: [[ticker:GILD]]) has agreed to pay $275 million for 49.9 percent of the company plus the option to pay another $315 million and make the startup eligible for up to $1.15 billion more in milestone payments to acquire the remaining 50.1 percent.
The technologies used at privately held Pionyr, which launched in 2015, were developed by its founders, University of Toronto and UCSF professors Sachdev Sidhu and Max Krummel, respectively.
Pionyr has designed antibodies intended to manipulate cell populations in the area around a tumor, which is often called the microenvironment, in a way that prompts a stronger immune response. In cancer, it aims to change the makeup of the cell populations at the site of a tumor to favor myeloid immune cells that play a role in prompting an immune reaction over those that tamp it down.
“What we’re doing is taking the myeloid infiltrate and we’re rebalancing and reconfiguring the cells that are in that myeloid infiltrate to now enhance the immune response rather than to hinder the immune response,” president and CEO Steven James (pictured) said in an interview, of the process the company calls “myeloid tuning.”
James joined the company in February 2016. He was previously head of Labrys Biologics, which was acquired in June 2014 by Teva Pharmaceutical.
The company has raised $78 million since its founding, including a $69 million round in 2017. In late 2019 Pionyr’s management team began considering how best to finance the advancement of its programs. The company plans to request the FDA’s OK to start human tests of its two most advanced drug candidates in the third quarter.
“We started thinking toward the end of last year that we had a pretty nice pipeline and that funding all of it on our own through private financings would be a challenge,” James said.
The company was not quite ready to tap the public markets either, so it landed on the notion of partnering one of its assets to get the money it needed to continue moving its pipeline ahead until it was ready for another round of private financing or for an IPO. But Gilead, the selected partner, wanted more.
The transaction, expected to close “shortly,” keeps Pionyr independent for the time being, fully in charge of advancing its programs—with significantly more resources. Gilead may pay to exercise its acquisition option once Phase 1b trials of Pionyr’s two lead programs are complete, or sooner, if it chooses.
“Gilead was … interested in the work we were doing, interested in the myeloid compartment as a rich environment for new targets and new therapies, and we have, I think, one of the best biology platforms and targets and antibodies that target the cells of the myeloid infiltrate in the tumor microenvironment,” James said. “They came up with this creative deal structure.”
Lead drug candidate PY314, which targets a receptor called TREM2, is designed to destroy cells that are contributing to immune suppression. The other program Pionyr plans to ask the FDA for permission to test in humans this year, PY159, targets the receptor TREM1 in a bid to reprogram such cells into ones that instead activate an anti-tumor immune response. The company plans to test these drugs in patients with solid tumors for whom checkpoint inhibitor therapies don’t provide benefit.
To support its work over the next 18 months, Pionyr aims to add 20 to 30 more employees to its current headcount of about 40.
“This is a partnership that will go out two to three years and start generating data in that timeframe that we’ll be sharing with [Gilead] and allow them to make judgements,” James said.
Once the transaction is complete Gilead may nominate one person to the Pionyr board of directors and, along with Pionyr’s other shareholders, select and nominate an independent board member, too.
Pionyr’s investors include New Enterprise Associates, OrbiMed, SV Health Investors, Sofinnova Ventures, Vida Ventures, Osage University Partners, Mission Bay Ventures, and Trinitas Ventures.
