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Here’s What the AstraZeneca and NewLink Genetics Deal Means for Everyone Involved

Here's a look at the latest deal in oncology with a look at the science and what it means for the players involved.

AstraZeneca plc (ADR)(AZN) just announced that it has inked a deal with development stage biotechnology company NewLink Genetics Corp (NLNK) that will see the two team up in the development of a combination therapy that adds NewLink’s indoximod to AstraZeneca’s Imfinzi in an attempt to improve the standard of care therapy in patients with metastatic pancreatic cancer.

This collaboration could be a big deal for all parties involved. NewLink has struggled of late, with the company down close to 50% on early September highs (recorded on the back of some positive clinical trial data) and the announcement of a collaboration with a company the size of AstraZeneca in and of itself should be enough to help boost near-term market capitalization. If the combination works, there’s a substantial revenue boost on the cards longer-term.

For AstraZeneca, the benefit is rooted in differentiating one of its lead oncology assets from those offered by competitors and, just as importantly, potentially negating the impact of generics on Imfinzi’s sales.

For the population of patients suffering from metastatic pancreatic cancer, which generally has a poor prognosis (the fact that it is metastatic in and of itself suggests late stage, but combined with the fact that pancreatic cancer is one of the deadliest cancers in the US and the need for a fresh treatment option becomes even greater) having access to an alternative to current standard of care could make a massive difference to outcome.

So that is where the advantages of this sort of project lie, what are the chances of it being successful?

For that, we’ve got to look at science.

Imfinzi is what’s called a PD-L1 inhibitor. Many cancerous cells express something called a programmed death-ligand 1, which is the PD-L1 element of the name for this sort of drugs. In a normal environment, T cells have PD-1 receptors that bind with healthy cells to induce programmed cell death, or apoptosis. PD-L1, however, can bind to the PD-1 receptors on T cells and essentially block them, meaning that the T cells are unable to induce programmed cell death. This is one of the reasons why cancer cells are able to effectively hide from the immune system and, in turn, are able to replicate unchecked and spread through the body.

Indoximod is an IDO inhibitor. IDOs are enzymes that, when released, create an environment within which cancer cells are able to shield themselves from the immune system. The idea behind Indoximod, and indeed, IDO inhibitors in general, is that by stopping the IDO enzymes from being active, the drug can change the environment to one in which cancer cells are unable to hide.

Add this type of drug to a course of Imfinzi therapy, then, and the idea is that you can improve on the performance of the latter. To put this another way, one drug stimulates an immune response while the other makes it incredibly difficult for cancer cells hide from the immune cells that arise on the back of the stimulated response.

That’s the theory, at least – how are the companies hoping to prove this theory?

AstraZeneca and NewLink are going to share the cost of a phase 2 trial set up to demonstrate this concept in the above-mentioned metastatic pancreatic cancer population. The trail will have three separate arms – one that receives the combination of Indoximod and Imfinzi plus standard of care therapy, another that receives standard of care therapy alone (chemotherapy), and a third that receives Imfinzi plus standard of care.

As yet, we don’t have any combination on exactly when the trial will initiate but it’s safe to say that we will almost certainly see enrolment kickoff before the end of this year. AstraZeneca is not known for hanging around in the sort of situation and especially given that the company is rushing to prove a differentiating factor for its blockbuster assets, things should move pretty fast.

Disclosure: The author has no positions in any of the stocks mentioned in this piece.