Arcus adds WuXi Biologics-developed PD-1 drug under $816M deal

Arcus Biosciences CEO Terry Rosen told FierceBiotech last year that checkpoint inhibitor research is "something to double down on—we’re going to bet big," and he just did, through an exclusive licensing deal that could amount to $816 million.

The deal grants Arcus North American, European and Japanese rights to GLS-010, an anti-PD-1 antibody Chinese firm Gloria Pharmaceuticals has contracted WuXi Biologics to develop, using Ligand Pharmaceuticals' transgenic rat platform OmniRat.

The Chinese companies stand to collect $18.5 million up front, $422.5 million from development and regulatory milestones, plus up to $375 million for commercialization. After getting exclusivity to GLS-010, Arcus is planning to pair the checkpoint inhibitor in 11 cancer combo therapies. It also agreed to pay tiered royalties that range from the high single-digits to low double-digits on net sales of treatments that use GLS-010.

AB928, a dual antagonist of the adenosine receptors A2aR and A2bR, and AB154, a TIGIT blocker, are furthest along in Arcus’s pipeline—though both are still in preclinical studies—and are likely to be paired up first with GLS-010.

Gloria received the go-ahead from China’s FDA in March to test GLS-010 in humans.

In hindsight, Rosen already had a clear vision of Arcus having control over its own PD-1 antibody when he founded the company in 2015 after successfully selling Flexus Biosciences to Bristol-Myers Squibb for $1.25 billion.

"Everyone knows that combinations are important, but it’s become apparent that in immuno-oncology it may be advantageous to own or control parts of the combination," Rosen told FierceBiotech when his company was named a Fierce 15 winner in 2016.

Although the checkpoint inhibitor realm already has Merck & Co., Bristol-Myers Squibb, Roche, AstraZeneca and a partnership between Pfizer and Merck KGaA, latecomers apparently are not giving up. Just about a month ago, Celgene got its hands on a PD-1 drug in a potential $1.4 billion deal with China’s BeiGene. Back in 2015, Incyte inked a $795 million PD-1 deal also with a Chinese company, Jiangsu Hengrui Medicine, getting ex-China rights to SHR-1210.

As an offshoot of the licensing deal, WuXi Biologics will also get an exclusive 3-year agreement to develop Arcus's biologics portfolio and will be the sole manufacturer of GLS-010 for some time. The WuXi AppTec subsidiary went public and started trading on Hong Kong, S.A.R., China stock exchange on June 13.