Celgene to collaborate with tiny Jounce on cancer immunotherapy

(Reuters) - Privately held Jounce Therapeutics Inc, which is working on treatments designed to use a patients’ own immune systems to better attack cancer, said on Tuesday it had entered into an collaboration and investment agreement with Celgene Corp worth more than $2.5 billion.

The deal for the tiny Cambridge, Massachusetts-based company comes just at little more than three years after it was launched with funding from life sciences investor Third Rock Ventures.

Bristol-Myers Squibb Co and Merck Inc are currently considered the leaders in the immunotherapy race, which has produced drugs that have resulted in unprecedented survival rates for some of the most deadly diseases, including advanced melanoma and advanced lung cancer.

In practice, doctors say, about 20 percent of advanced cancer patients respond to these new drugs, and a subset of those patients can have lasting remissions.

“When we look at immuno-oncology in the last five years, it’s had a huge impact on patients ... but it’s still a minority of patients that are getting the full benefit,” Jounce Chief Executive Richard Murray in an interview.

Jounce’s technology focuses on targeting biological markers on tumors to better match therapies to patients.

“The approach is not to repurpose immunology drugs into oncology but rather to understand human tumors and the immune system cells within these tumors,” said Murray, who was involved in development of Merck’s blockbuster immunotherapy Keytruda.

“Our goal is to bring the right immunotherapy to the right patient population,” Murray said. “We view it as immunotherapy 2.0.”

Jounce’s lead drug, JTX-2011, targets a protein on the surface of certain cells that is believed to stimulate an immune response against a patient’s cancer.

The drug, which is being developed to treat solid tumors by itself and in combination with other therapies, is expected to enter human testing later this year.

Jounce, which has 60 employees, will receive an upfront payment of $225 million from Summit, New Jersey-based Celgene for an option to jointly develop JTX-2011 and other drugs.

Celgene will also invest $36 million in Jounce in return for an unspecified minority stake.

Jounce, which takes its name from the energy it takes to move a particle into a new direction, also stands to make up to $2.3 billion in milestone payments.

Celgene’s investment comes a year after it said it would invest about $1 billion in Juno Therapeutics Inc, which is working on another form of immunotherapy.

Reporting by Natalie Grover in Bengaluru; Editing by Ted Kerr