Johnson & Johnson is paying $140 million upfront to buy oncolytic immunotherapy startup BeneVir Biopharm. The outlay gives J&J control of preclinical prospects designed to evade the body’s immune system, enabling them to keep killing cancer cells for longer.
Rockville, Maryland-based BeneVir grew out of the research of New York University professor Ian Mohr, Ph.D. The work led to the creation of a technology dubbed T-Stealth. Like all oncolytic viruses, BeneVir’s assets are designed to get into cancer cells, replicate and kill their host, thereby chipping away at the tumor and triggering an immune response.
The difference, in theory, is that BeneVir’s T-Stealth technology enables its viruses to avoid being gobbled up by T cells. BeneVir has yet to generate clinical data to validate its hypothesis but has evidently done enough in preclinical to turn heads at J&J’s subsidiary Janssen.
In addition to the $140 million upfront, J&J has committed to up to $900 million in milestones, bringing the potential size of the deal up past the $1 billion mark. The outlay gives J&J assets it thinks can support a push to carve out a piece of the solid tumor market.
“Oncolytic viral immunotherapy holds exciting potential in the treatment of solid tumors through the priming and augmenting of an anti-tumor immune response,” Janssen’s Peter Lebowitz, M.D., Ph.D., said in a statement. “BeneVir’s unique technology platform complements our immuno-oncology research, which is focused on bringing forward an array of novel immunotherapies and combinations that may improve treatment outcomes for patients.”
J&J wants to keep the BeneVir team together at its existing base in Rockville, while connecting it up to Janssen’s broader oncology group.
The deal represents a big exit for a biotech that has flown under the radar and got by on financing rounds that are meagre by the standards of the oncology world. BeneVir’s SEC filings show $6 million in equity financing dripped into its account from 2014 to 2016, followed by $2 million in debt last year. HC2, which first invested in BeneVir in 2014, holds three-quarters of the stock.
J&J’s willingness to hand over $140 million upfront is the latest indication of the rising regard Big Pharma has for cancer-killing viruses. Interest in the modality has ebbed and flowed over the years; Amgen won approval for oncolytic virus T-Vec in 2015 but that didn’t light the blue touch paper.
Now though, the sector is heating up as leading cancer players hunt for drugs to complement checkpoint inhibitors and other immuno-oncology therapies. In February, Merck agreed to pay $394 million to buy Viralytics. And late last year, AbbVie picked up an option on three Turnstone Biologics assets.