Leap Therapeutics Surges On License Agreement With BieGene
Zacks Investment Research | Jan 05, 2020 08:25PM ET
Leap Therapeutics, Inc. (NASDAQ:LPTX) announced that it has entered into an exclusive option and license agreement with China-based biopharmaceutical company, BeiGene, Ltd. (NASDAQ:BGNE) . Per the agreement, Leap Therapeutics granted BeiGene an option to gain exclusive rights to develop and commercialize its anti-Dickkopf-1 (DKK1) antibody, DKN-01, in Asia (excluding Japan), Australia and New Zealand. Leap Therapeutics will retain all rights to DKN-01 for the rest of the world.
Per the terms of the agreement, Leap Therapeutics will receive $3 million in upfront payment from BeiGene. The company is also eligible to receive an additional payment if BeiGene exercises its option, following initial proof-of-concept studies. The agreement also includes additional payments from BeiGene, related to certain development, regulatory, and sales milestones, taking the total deal value to up to $132 million.
Apart from the licensing deal, Leap Therapeutics also signed private equity financing deals with BeiGene and two other institutional investors worth approximately $27 million. The company had nearly $10 million in cash resources as of Sep 30, 2019. These deals will boost its cash resources significantly and support its operations in the long term.
Shares of Leap Therapeutics surged almost 52% following the announcement of these deals. However, shares of the company have declined 46.5% in the past year while the industry remained flat in that period.
Leap Therapeutics is developing monotherapy and several combination therapies of its pipeline candidate, DKN-01, in multiple early- to mid-stage studies targeting esophagogastric, hepatobiliary, gynecologic and prostate cancers. We note that Leap Therapeutics is currently developing DKN-01 in combination with other PD-1/PD-L1 inhibitors namely Merck’s (NYSE:MRK) Keytruda, Bristol-Myers’ (NYSE:BMY) Opdivo and Roche’s Tecentriq.
BeiGene stated in its press release that DKN-01, in combination with checkpoint blockade, has shown promising signals in a biomarker-defined population of gastric cancer patients.
As part of the licensing deal, BeiGene intends to develop DKN-01 in combination with its anti-PD-1 inhibitor, tislelizumab, as treatment for gastric cancer (“GC”)/gastroesophageal junction cancer (“GEJ”) whose tumors express high levels of DKK1. However, Leap Therapeutics will conduct studies on the combination regimen in first and second-line GC/GEJ, before exercise of option by BeiGene, The studies are expected to start in the first half of 2020.
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