2021-07-31| Funding

Lilly Bets $2 Billion on Kumquat Biosciences for Novel Immune-Oncology Therapeutics

by Daniel Ojeda
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Loxo Oncology, a research and development team at Lilly, announced a collaboration to develop novel immune-oncology (IO) therapeutics with Kumquat Biosciences in a deal worth more than $2 billion. 

IO is the approach of using the body’s immune system to fight cancer. Checkpoint inhibitors are a type of IO. These blockbuster drugs are valuable tools to fight cancer. Companies are now looking for the next generation IO therapeutics. 

Lilly has acquired and entered collaborations with several companies to strengthen its position in IO. Some of its top acquisitions include Loxo Oncology for $8 billion and Armo BioSciences for $1.6 million. Additionally, Lilly has partnered with companies such as Merus NV to develop novel T-cell re-directing bispecific antibodies, a type of IO therapy. With its partnership with Kumquat, Lilly aims to develop the next generation IO by using small molecule inhibitors. 

“Using small molecule inhibitors to target specific tumor antigens in complex with the immune machinery presents a unique opportunity to stimulate an enhanced tumor-specific immune response,” said Jacob Van Naarden, chief executive officer of Loxo Oncology at Lilly.


Discovering Promising Candidates with IO Platform

Launched in 2019 and based in San Diego, Kumquat was co-founded by Dr. Yi Liu, currently serving as Chief Executive Officer, and Dr. Pingda Ren, currently serving as Chief Operation Officer. To date, Kumquat has raised almost $106 million from investors. Their investors include OrbiMed, Lilly Asia Ventures, Sequoia Capital, EcoR1, and Roche Ventures. 

With the new multi-year partnership with Lilly, Kumquat will use its small molecule IO platform to discover promising molecules. Lilly can choose an undisclosed number of molecules to develop and commercialize worldwide, excluding Greater China. Kumquat will retain the rights for all molecules for development and commercialization in Greater China. Although Lilly has the option to co-commercialize in this region. For its part, Kumquat has the option to co-develop and co-commercialize an undisclosed number of drug candidates in the US.

“Kumquat is developing a novel small molecule IO platform, and this collaboration with Lilly is expected to greatly expedite the development of this platform and maximize its full potential. We look forward to working with Lilly to identify the next generation IO drugs that will benefit a broad population of patients,” said Yi Liu, CEO of Kumquat.

As part of the deal, Kumquat will receive $70 million in cash, and it can receive more than $2 billion in milestone payments. The payments are contingent on preclinical milestones, development and commercialization achievements, as well as royalties on sales.

“We look forward to working with the accomplished Kumquat team to identify candidate medicines that interact with this target class.” said Jacob Van Naarden, chief executive officer of Loxo Oncology at Lilly.

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