Hours before the official kickoff of the 34th Annual J.P. Morgan Healthcare Conference (JPM) in San Francisco, Sanofi SA gave a big boost to partner Warp Drive Bio LLC in an amended collaboration that could exceed $750 million, while inking a second licensing deal with French biotech Innate Pharma SA.

Paris-based Sanofi joined Third Rock Ventures and Greylock Partners in 2012 to back Cambridge, Mass.-based Warp Drive, which uses its genomic mining and Small Molecule Assisted Receptor Targeting, or SMART, platforms to discover new medicines using molecules and mechanisms discovered in nature. (See BioWorld Today, April 9, 2012.)

The back-to-nature approach is similar to that underlying another start-up, Lodo Therapeutics Corp., which launched Monday from the New York arm of Accelerator Corp. (See BioWorld Today, Jan. 11, 2016.)

Warp Drive's concept is to take existing technologies and combine them in a different way to identify molecules in nature that could create successful modalities for previously undruggable targets and produce durable treatment responses. Its SMART drugs are able to penetrate cells, where they bind to an intracellular receptor. The resulting complex then inhibits a specific intracellular target.

The company's genomic search engine queries DNA sequences within bacterial genomes and identifies natural product drugs that were historically "hidden" within microbes.

The initial focus of the SMART discovery efforts was a series of drugs that antagonize the RAS family of proteins, which has one of the highest mutation rates in cancer. In the modified partnership, Sanofi will take an exclusive license to develop three oncology programs targeting human oncogenes, including RAS, plus an antibiotics program targeting Gram-negative bacteria.

Warp Drive retained the rights to discover and develop other targets, alone and in collaboration with other partners.

During its formation, Warp Drive created a five-year put option to force an acquisition by Sanofi if certain milestones were met, with a price tag that could potentially exceed $1 billion. The option covered only those assets included in the initial collaboration, whose details were kept under wraps. If Warp Drive's shareholders decided not to put the firm to Sanofi, the big pharma could exercise a call option on an acquisition.

The "reshaped" alliance eliminates that arrangement, according to Warp Drive CEO Laurence Reid.

"When we started with Sanofi, the idea was that we were exploring the platforms," Reid said. "What we're doing at this time is focusing our collaboration on these four programs."

Although specific terms were not disclosed, Warp Drive is eligible to receive cumulative payments from Sanofi that exceed $750 million across the four programs, including an equity investment; research, clinical and regulatory milestones; and R&D fees.

Warp Drive will lead the collaboration for five years, with Sanofi set to receive global licenses to develop and commercialize candidates. In oncology, Warp Drive has the option to lead development from post-investigational new drug filing to phase II studies, with Sanofi assuming development through filing of new drug applications. The pharma will lead all development activities in the antibiotic collaboration.

Warp Drive retained the option to co-commercialize oncology assets from the alliance in the U.S. The biotech is eligible for commercial milestones and tiered royalty payments on ex-U.S. sales of oncology products and on global sales of antibiotics from the partnership.

"The agreement defines Sanofi's rights in a finite, focused way," Reid told BioWorld Today. "We're positioning the company to grow as an independent organization for the future."

Sanofi's stake in Warp Drive was an outgrowth of the pharma's Sunrise initiative, which seeks early stage investment opportunities that align with its development and commercialization abilities.

The relationship between the companies "evolved" as Warp Drive's experiments with its genome-mining program led to the elucidation of the natural mechanism to produce new modalities, Reid explained.

After work reached that stage, about 18 months ago, Warp Drive began "forward engineering" the mechanism to create a diverse pipeline that could eventually encompass therapies not only for oncology but also for inflammatory and metabolic diseases – "more opportunities than Sanofi was fully able to swallow," he said.

The companies negotiated the new deal over the course of roughly a year. The programs licensed to Sanofi remain in discovery, Reid said, with the RAS program likely to enter the clinic in late 2018 or early 2019.

"We're very pleased at the economics that the deal provides to build the programs," he said. "Equally important, the fact that we can lead the programs through clinical proof of concept and have the opportunity to participate in commercialization of the oncology products in the U.S. gives us a lot of control, so the deal is inherently value-creating for the company."

In the meantime, Warp Drive is advancing other programs on its own "and we'll pick the best opportunities as those mature," he added.

Reid, an industry veteran with big pharma and biotech credentials, joined Warp Drive in March 2015, replacing co-founder Gregory Verdine, who continues as the company's president and chief scientific officer and chairman of the scientific advisory board. With 60 employees, the company has sufficient talent onboard to advance its lead programs into preclinical development, when a few employees will be added, Reid said.

The economics of the Sanofi reboot also give Warp Drive "some extra funds for company building," he explained. "We don't expect any equity financing in the foreseeable future, private or public, but we would like to do other partnerships. We'll try to do another pharma partnership around the SMART modality during 2016."

2ND DEAL AIMS TO STRENGTHEN SANOFI'S HAND IN ONCOLOGY

In the deal with Innate, of Marseille, France, which is potentially valued at up to €400 million (US$436 million), the companies will collaborate to develop up to two bispecific antibodies that engage natural killer (NK) cells to destroy tumor cells by activating the receptor NKp46. The alliance will combine Innate's technology platform with Sanofi's bispecific antibody format and tumor targets.

Specific terms were not disclosed, but the deal is entirely back-loaded, with Innate eligible to receive development and commercial milestone payments as well as royalties on net sales. Sanofi will manage the development, manufacturing and commercialization of products resulting from the collaboration.

Sanofi is set to present at JPM on Tuesday morning.

Meanwhile, Innate bolstered its own pipeline by in-licensing rights to a preclinical first-in-class CD39-targeting checkpoint inhibitor program from Orega Biotech SAS, of Lyon, France. Financial terms were not disclosed on that deal, either, but involve an up-front payment plus development and commercial milestones, as well as royalties on product sales. The agreement follows a research collaboration the two companies entered in 2014, based on the work of Orega's co-founder Armand Bensussan, of Saint-Louis Hospital in Paris.

CD39, a cell-surface marker for regulatory T-cells, functions as an ectonucleotidase, converting pro-inflammatory ATP or ADP to AMP.

A second ectonucleotidase, CD79, then converts AMP to adenosine, a critical negative regulator of innate and adaptive immunity. It mediates its effects by interacting with the adenosine A2a receptor (A2AR). CD39 is also expressed by certain tumor cells and contributes to tumor immune evasion. Innate aims to block both immunosuppressive mechanisms by targeting the pathway upstream and maintaining a pro-inflammatory milieu within the tumor microenvironment.

Others are targeting the same pathway by blocking that downstream interaction between adenosine and the A2AR. Last October, Palobiofarma SL, of Pamplona, Spain, entered an agreement with Novartis AG, of Basel, Switzerland, to develop PBF-509, an adenosine A2A receptor antagonist, currently in phase I trials in lung cancer. In August 2015, the Heptares Therapeutics arm of Tokyo-based Sosei Group Corp., entered a similar deal with London-based Astrazeneca plc, involving its A2AR antagonist HTL-1071.

In April 2015, Astrazeneca inked a separate $1.275 billion in-licensing deal with Innate, including $250 million up front, around IPH2201, a NK cell-activating antibody in phase II, to advance the candidate both as a monotherapy and in combination with MEDI4736 (durvalumab) an anti-PD-L1 immune checkpoint inhibitor in development by Astrazenca's biologics arm, Medimmune. (See BioWorld Today, April 27, 2015.)