IDEAYA Capitalizes on $120 Million Deal with GSK

By Ruchi Jhonsa, Ph.D.

With its stock prices climbing to a record high following the deal, the synthetic lethality specializing oncology startup announced the public offering of approximately 7.7 million shares of common stock.

Synthetic lethality is a concept first proposed by Calvin Bridges in 1922 when studying the model organism Drosophila melanogaster. It refers to the death of cells caused by a concomitant mutation in two genes, each of which is otherwise viable alone. This concept is now being used as a strategy to combat cancer as it offers the possibility of selectively targeting cancer cells with the potential to reduce drug resistance and treatment-associated side effects.

One of the examples of synthetic lethal gene pair is PARP and BRCA1/BRCA2, the DNA damage repair proteins that correct either one strand or both the strands of DNA, respectively. Inhibition of PARP function in cancer cells harboring BRCA1 mutation compromises DNA repair in cancer cells, priming them for death. AstraZeneca’s Lynparza, Clovis Oncology’s Rubraca, and GSK’s Zejula are FDA approved PARP inhibitors currently used in cancer treatment.

Another company that is set on this route is San Francisco-based IDEAYA Biosciences. The company got its break in the biotech industry with its synthetic lethality programs that include MAT2A, Pol Theta, and Werner Helicase proteins. Previously, these novel and known targets attracted attention from several investors, including Alphabet, Roche, 5 AM Ventures, and Celgene. On June 16th, GlaxoSmithKline also joined the league by partnering with IDEAYA to expand its oncology portfolio.

With this deal, GSK will get the hold of IDEAYA’s synthetic lethality programs MAT2A, Pol Theta, and Werner Helicase that are expected to reach clinical trials within the next three years. GSK enters the deal at the ripe time when IDEAYA has already worked out most of the details of the proteins, including their crystal structures, and has shown in vivo proof of concept in relevant animal models for its MAT2A and Pol Theta programs.

“GSK is the ideal strategic partner for IDEAYA, as this partnership enables compelling potential combinations and the opportunity to build the industry leading Synthetic Lethality pipeline that targets molecularly defined populations in several major solid tumors, including potentially lung, prostate, breast, colorectal, and ovarian cancer,” said Yujiro S. Hata, CEO, and President, IDEAYA Biosciences.

Deal Terms

This package deal grants an upfront payment of $100 million alongside $20 million in stock to IDEAYA, who will be responsible for leading the early clinical development of the MAT2A program. While IDEAYA will cover all the initial development costs for the programs, most of the global development will be covered by GSK, with a 5th of the contribution from IDEAYA.

IDEAYA will receive a 50% US profit share, and ex-U.S. royalties for MAT2A and Werner Helicase programs upon approval and will be responsible for 20% of global development costs for licensed products developed with GSK. Additionally, IDEAYA will receive royalties for the Pol Theta program for which GSK will cover all the research, development, and commercialization costs. Furthermore, GSK will cover all the commercialization activities and costs for licensed products globally.

IDEAYA’s Synthetic Lethality Pipeline

The company is actively pursuing the discovery and development of small-molecule inhibitors of several novel, known, and undruggable targets based on synthetic lethality. Currently, the company’s pipeline includes programs targeting MAT2A, Pol-theta, PARG, and WRN proteins. MAT2A encodes for methionine adenosyltransferase enzyme that catalyzes the biosynthesis of enzyme cofactor, SAM used in methyl transfer reactions.

Deleting this gene in cancers carrying MTAP mutation will decrease overall SAM production, leading to synthetic lethality. Pol-theta protein, which is involved in the DNA repair process, is a good target for tumors with homologous recombinant deficiency to induce synthetic lethality. Werner Helicase is a RecQ enzyme that is required for the maintenance of genome integrity. Suppression of WRN activity in tumors with a high number of microsatellite repeats results in synthetic lethality.

“GSK and IDEAYA have a vision to bring the next generation of innovative precision medicine therapies to patients utilizing the approach of Synthetic Lethality, and a highly complementary pipeline that has the potential to deliver transformative benefit for patients,” said Michael Dillon, Ph.D., Chief Scientific Officer, IDEAYA Biosciences.”

Initial Public Offering

At the end of May, IDEAYA announced the closing of its IPO of 5.7 million shares of common stock at a public offering price of $10.00 per share. Following the announcement of its GSK deal, on June 16th, its stocks hovered above $14, eventually settling at $12.84 when trading closed. Two days later, IDEAYA offered its 750,000 additional shares of common stock at a public offering price at $15 per share. Although this resulted in its stock falling around 23%, one cannot fault the company for capitalizing its position. With its exciting synthetic lethality pipeline, IDEAYA is poised to gain more in the long run.

Editor: Rajaneesh K. Gopinath, Ph.D.

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References

1. https://www.gsk.com/en-gb/media/press-releases/ideaya-and-gsk-announce-a-broad-partnership-in-synthetic-lethality-an-emerging-field-in-precision-medicine-oncology/
2. https://ir.ideayabio.com/news-releases/news-release-details/ideaya-announces-pricing-initial-public-offering

Author

Ruchi Jhonsa