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XBiotech Enters into an Agreement with Janssen for the sale of Bermekimab

12 Dec XBiotech Enters into an Agreement with Janssen for the sale of Bermekimab

XBiotech Inc (NASDAQ: XBIT), a clinical-stage Biopharmaceutical Company engaged in developing and commercializing True Human monoclonal antibodies, has announced the signing of a definitive agreement with Janssen Biotech, Inc., a pharmaceutical company of Johnson & Johnson (NYSE: JNJ), for the sale of its novel antibody Bermekimab, in exchange for a cash payment of $750 million, with a potential to receive another $600 million in milestone payments. Furthermore the Company will also sign manufacturing supply agreement and clinical services agreement with Janssen over the next two years, providing a source of additional revenue. A human monoclonal antibody of IgG1k isotype targeting Interleukin 1 alpha (IL1A), Bermekimab is capable of neutralizing interleukin-1 alpha (IL-1), primarily responsible for disease-causing inflammation.

Under the terms of the agreement Janssen Biotech will acquire all rights to bermekimab for dermatological diseases, while Xbitoech is free to use its proprietary True Human Antibody discovery program to develop antibody therapeutics that target anti-Il-1⍺ in a wide range of non-dermatological diseases. In addition, Xbiotech will be responsible for the clinical supply of bermekimab for Janssen under a supply agreement, besides providing clinical trial operation services to complete two ongoing Phase II clinical studies, evaluating bermekimab in Hidradenitis Suppurativa and Atopic Dermatitis.

John Simard, XBiotech’s President and CEO, commented,

“We are proud that Janssen has chosen bermekimab as an agent it believes could have an important impact. We believe their acquisition will enable recognition and increase awareness of the full potential of this first-in-class therapeutic. This transaction also provides us the opportunity to showcase our powerful True Human antibody discovery platform, which we are now utilizing to pursue next generation anti-Il-1⍺ antibody therapeutics to treat multiple areas of unmet need outside of dermatology.”

XBiotech intends to re-enter clinical development and will utilize the proceeds from this sale for advancing its True Human anti-IL-1⍺ antibody program, along with developing other anti-body therapeutics in its pipeline. The Company intends to use the funds to initiate a stock repurchase, subject to board approval.

XBiotech Inc (NASDAQ: XBIT)

Market Cap: $776M; Current Share Price: 19.38 USDChart
Data by YCharts

The Global market for therapeutic monoclonal antibodies (mAb) is expected to reach $114.6 billion by 2022, growing at a CAGR of 6.3% from $84.5 billion in 2017 according to a report by bbcresearch.com. Monoclonal Antibodies comprise of identical immune cells derived from a single parent cell and have revolutionized the way therapeutics are developed. Monoclonal antibodies have the ability to bind specifically to cells and proteins and stimulate the immune system to fight foreign cells and possess characteristics such as affinity to antigens and antigen specificity. 

The treatment market is divided into cancer, autoimmune diseases, haematological and dermatological disorders, with breakthrough treatments emerging in the field of cancer. There is a growing demand for human antibody therapeutics though there are other sources from which antigens can be derived such as chimeric, humanized etc.

The demand for mAb is driven by increasing research and development owing to government and regulatory impetus to the industry. Furthermore the rising demand for personalized and customized therapeutics and the fewer side effects and specificity offered by mAb will contribute to the growth in the market.

XBiotech leverages the power of the human body’s natural immunity to create breakthrough antibody therapies. The Company’s proprietary True Human™ technology are 100 percent human derived from individuals with natural immunity to specific diseases, and have demonstrated the potential to create therapeutic antibodies that are safe , efficient and have proven tolerability. It is currently engaged in developing a robust pipeline of antibody therapeutics for treatment of oncology, inflammatory conditions and infectious diseases, by using True Human™ antibodies that have a superior natural physiology and tolerance profile owing to immune selection in the body.

Bermikmab, also referred to as MABp1 and Xilonix, works specifically to neutralize interleukin-1 alpha (IL-1 α), responsible for angiogenesis, growth and spread of tumors and can regulate metabolism, fatigue and anxiety caused by advanced cancer. In addition the Company is building a robust pipeline of candidates focused on the application of MABp1 (bermekimab) to treat symptomatic colorectal cancer, advanced colorectal cancer, Type II Diabetes, Pancreatic Cancer, Plaque Psoriasis, Acne Vulgaris, Systemic Scleroderma and Lung, pancreatic and ovarian cancers to name a few.

Image Source: Company

The Company’s in-house clinical team handles a wide range of activities encompassing design, clinical site identification, initiation and medical monitoring, pharmacovigilance, regulatory submissions to FDA and EMA as per a Company statement. In fact the Company will now be extending these services to Janssen as part of the recent agreement.

Xbiotech uses its Super High Stringency Antibody Mining (SHSAM™) technology to screen large amounts of human blood donation for finding relevant antibodies. On identification of the gene responsible for the production of the antibody, bioreactor technology is used to replicate the gene in a scalable mammalian expression system. The Company’s unique disposable bioreactor technology allows for cost efficient production, shorter lead times and improved production flexibility.

XBiotech has a 40,000 square foot manufacturing facility, on its own 48-acre location, near Texas capital in Austin, which will be an advantage in the event of the Company’s commercialization of its product pipeline.

The Company is currently engaged in multiple clinical trials in therapeutic areas such as Hidradenitis Suppurativa, Systemic Sclerosis, Advanced cancers to name a few.

Risk Assessment

  • The Company is developing therapeutic candidates for diverse areas such as Oncology, Dermatology, Infectious Diseases, and Inflammatory disorders, a diverse pipeline not only mitigates the risk associated with clinical trials but will also help in the optimal utilization of resources.
  • Strategic Partnerships and Collaborations are the lifeline for clinical stage companies as they not only provide the necessary funds for the development but also bring in much needed technical and regulatory knowhow essential for the success of a clinical –stage company. The deal with Janssen is a validation of the Company’s technology and pipeline and may pave way for similar deals in other areas.
  • Clinical Trials are fraught with risk. However, XBiotech has a diverse pipeline of candidates which will help mitigate the risk in case of adverse results or the failure to meet endpoints in any of its ongoing trials.
  • Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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