Years after linking arms with Bristol Myers and both Mercks, Sutro finds its latest partner in Tokyo

28 Jun 2022
endpts.com
AntibodyADCCollaborate
Astellas and Sutro Biopharma are linking arms on a new field of antibody-drug conjugates that they hope will improve upon existing cancer immunotherapies. The Tokyo pharma will dole out $90 million in cash for the collaboration, the companies said Monday afternoon. That upfront payment will extend the South San Francisco biotech’s runway from late 2023 into the first half of 2024, Cowen analysts noted. Investors appeared to welcome the deal, sending Sutro shares $STRO up 12% before the opening bell Tuesday. Sutro will provide its know-how in immunostimulatory antibody-drug conjugates and Astellas will bring its global oncology R&D expertise to the table. The goal is to directly kill tumor cells with a potent cytotoxin paired with a component that excites an immune response particular to the patient’s tumor cells. The pair believes the approach can beat out existing immunotherapies and help patients who don’t respond to immune checkpoint inhibitors. Three biological targets are on the horizon for the duo. Sutro will handle research and preclinical studies to identify candidates and Astellas will take over from there, overseeing clinical trials. “Sutro is a leading company in the area of iADCs, a new modality, and has its own original iADC technologies. The strategic partnership with Sutro will help us expand our pipeline and widen the choice of cancer immunotherapies,” Astellas strategy chief Naoki Okamura said in a statement. Each of those three potential products could turn into an additional $422.5 million in biobucks, which equates to about $1.26 billion in milestone payments, should all three make it to fruition. Tack on low double-digit to mid-teens tiered royalties, if the drugs get on the market. Sutro can also sign up to share in the costs and profits to develop and commercialize the drugs in the US. “We think this new research collaboration with Astellas further validates Sutro’s unique conjugation technology,” Cowen analysts wrote in a note. Sutro has crossed its Ts and dotted its Is on Big Pharma collaborations in recent years, with Bristol Myers Squibb via Celgene, Merck KGaA and Merck . The nearly two-decade-old Stanford spinout also lined up a $40 million upfront payment last December in exchange for licensing its lead drug in parts of Asia to China pharma Tasly Biopharmaceuticals. But that deal took a turn — after a batch of data from a Phase I trial, in which a patient died following a case of low levels of a certain white blood cell, Tasly indicated it wanted to renegotiate terms, Sutro disclosed in February. The upfront payment switched to $25 million, the companies later said.
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