Jounce Therapeutics, Inc.

Concentra Biosciences, a shell company from Tang Capital, wants to buy another biotech that has found itself in a bind. Kevin Tang’s shop told Kezar Life Sciences’ board on Tuesday that it is willing to pay $1.10 per share to buy out the Bay Area biotech. The move comes just days after Kezar stopped its Phase 2b clinical trial in lupus nephritis after four patients died. The trial was then put on official hold by the FDA this week. Kezar’s share price $KZR spiked 22% to 91 cents apiece in post-market trading after Concentra’s proposal became public. Kezar had closed Tuesday at 74 cents per share. The biotech debuted as a public company at $15 per share in June 2018. Tang Capital owns 9.9% of Kezar’s outstanding shares. The investor has bought more than six million shares in Kezar since Sept. 30, according to an SEC filing . Concentra’s non-binding proposal also comes with the potential for further payments. If the deal goes through and Concentra is able to out-license or sell Kezar’s experimental drugs and intellectual property, then shareholders could get 80% of those net proceeds. In his letter to the board, Tang said Concentra “has funds immediately available to execute this transaction.” “Concentra has the expertise and resources to maximize the value of the CVR for the benefit of Kezar shareholders,” Tang wrote. “This may include, if appropriate, completing PORTOLA, an ongoing Phase 2a study of zetomipzomib in patients with autoimmune hepatitis.” Concentra has had a mixed bag of success. Atea Pharmaceuticals and LianBio rejected the shell company’s unsolicited bids last year. Theseus Pharmaceuticals and Jounce Therapeutics , meanwhile, both went with the takeover bids. DNA sequencing company Singular Genomics was also targeted by Concentra last month. Tang wants to hear back from Kezar by the close of business on Oct. 18. Otherwise, the offer will expire, he wrote in the letter. A Kezar spokesperson didn’t immediately respond to an Endpoints News inquiry. The 2015 Amgen spinout has had a string of setbacks in the past 12 months. In August, Kezar stopped enrolling patients in a Phase 1 solid tumor trial. Last October, it laid off 41% of its staff, swapped CEOs and ended preclinical R&D to keep the lights on. At the end of June, the company had $164 million in cash, equivalents and marketable securities.

Clasp Therapeutics was created in response to a question posed by scientific co-founder Bert Vogelstein: How can tumour-specific characteristics be leveraged for a powerful immune system attack, while also sparing healthy tissues? The answer: T-cell engagers (TCEs) designed to lock onto a combined genetic-immune signature present only on cancer cells.  Vogelstein, a renowned cancer geneticist and researcher at Johns Hopkins, was uniquely able to come up with this solution because he has a foot in two disparate cancer research schools of thought, Clasp chief executive Robert Ross told FirstWord. “The world of immuno-oncology and the world of precision oncology don't overlap very much,” Ross said. “Bert has this strong background in cancer genetics, and a cancer genetics background kind of puts you in the precision oncology bucket. Yet at the same time he is part of an immuno-oncology institute. So he's one of the few people who can really bridge the gap between precision oncology and immuno-oncology. And that's what's led to us targeting mutated oncogenes, a precision oncology approach, but leveraging the T-cell to go after them.” Vogelstein founded Clasp along with fellow Johns Hopkins researcher Drew Pardoll, who helped create immunotherapy companies Amplimmune and Jounce Therapeutics. The potential for a precision immuno-oncology (IO) therapy that avoids normal tissues – and the safety issues that have plagued development of TCEs for solid tumours – prompted a striking $150 million series A for Clasp led by Catalio Capital Management, Third Rock Ventures, and Novo Holdings.The funds will bring the biotech’s TCEs to the clinic for solid tumours and provide enough runway to generate in-human data, Ross said. Other investors participating in the round include Vivo Capital, Cure Ventures, Blackbird BioVentures, Pictet Alternative Advisors, American Cancer Society’s Bright Edge and Alexandria Venture Investments.Immuno-genetic comboClasp is taking advantage of the biology of human leukocyte antigens (HLAs) to target oncogenic proteins that are typically only expressed intracellularly. HLAs sample the internal proteins in a cell and express fragments on the surface for T-cells to see, like “a waiter carrying a tray with food,” Ross explained. The “food” peptides are well-known cancer-driving mutations like p53, KRAS, or PI3K. Clasp’s TCEs are proteins engineered to recognize the specific combination of “food” and “tray,” he added, to ensure that healthy tissues aren’t affected by the immune attack. The company has scoured clinical and translational data from patients to confirm that certain HLA-mutated peptide combinations are expressed naturally in tumour cells – though they often occur in such low numbers that they don’t trigger a T-cell attack. That’s why TCEs are the perfect modality to leverage against these combo targets, Ross said, because they can ramp up a naturally-occurring interaction to therapeutically effective levels – without being hampered by safety issues that occur when an IO target is also expressed on normal tissues. Target advantagesThis tact could avoid some of the shortcomings of TCEs, Ross said. Common IO targets such as CD19, CD20, and BCMA are expressed preferentially on cancer cells – but they’re not completely absent from healthy cells – making them too toxic to treat solid tumours. Plus, cancers can downregulate expression of those proteins, whereas oncogenic drivers are “fundamental to the cancer,” he added, and can’t be removed. But because those mutations are expressed intracellularly, they can’t be targeted by an antibody – which brings Clasp full-circle to its reasoning for HLA-oncogene combination targeting.  Clasp plans to pursue a tumour-agnostic approach in the clinic for its engineered proteins, which are designed to be easier to manufacture and reproduce than currently approved TCEs.

Jazz Pharmaceuticals added another one of Redx Pharma’s assets to its oncology pipeline, this time paying $10 million upfront for a preclinical KRAS inhibitor programme. The company previously acquired a pan-RAF inhibitor programme from Redx, with the parties later inking a deal to develop drugs against two cancer targets in the MAPK pathway. “Redx has discovered a number of preclinical KRAS candidates and we plan to leverage our collective oncology development expertise to identify and advance the most promising molecules toward the clinic," remarked Robert Iannone, global head of R&D at Jazz.Amgen’s Lumakras (sotorasib) became the first KRAS inhibitor to hit the market, although it has struggled commercially, with sales down 2% last year at $280 million. Meanwhile, the FDA recently declined to grant full approval to the drug for patients with KRASG12c-mutated non-small-cell lung cancer after asking for a new confirmatory study.The companies will collaborate to advance candidates through IND-enabling studies, with Jazz being responsible for all clinical development, regulatory, manufacturing and commercialisation activities. Redx is eligible to receive up to $870 million in milestone payments from Jazz,  as well as tiered, mid-single digit percentage sales royalties.Meanwhile, Redx CEO Lisa Anson noted that the upfront milestone payment from the agreement with Jazz will extend its cash runway into 2025. The company unsuccessfully tried to merge with Jounce Therapeutics last year, with the latter dropping a proposed deal in favour of an acquisition by Concentra Biosciences.