Following the completion of all preclinical proof-of-concept, safety and specificity studies and toxicology studies required to commence a Phase 1 trial to treat gastric cancers, Arovella Therapeutics Ltd (ASX:ALA) has signed a global, exclusive licence agreement with Sparx Group for the use of a novel monoclonal antibody (mAb - known as SPX-101) sequence targeting Claudin 18.2 (CLDN18.2) in cell therapies.
The agreement consists of an equity-based upfront licensing fee and future stage-gated fees with industry-standard milestone payments in cash and equity.
Arovella will use the SPX-101 sequence to generate a chimeric antigen receptor (CAR) that will be incorporated into its iNKT cell platform to target gastric cancer (GC), gastroesophageal junction cancer (GEJC), pancreatic cancer (PC), and other solid tumours.
CLDN18.2-iNKT cells with direct cancer-killing ability are expected to provide superior cancer killing properties relative to an antibody alone.
CLDN18.2 has gained validation as a therapeutic target, exemplified by several products currently in clinical development. Zolbetuximab, the most advanced among these, was acquired by Astellas Pharma for €422 million upfront, with the possibility of an additional €860 million in milestones, following its takeover of Ganymed Pharmaceuticals in 2016. The US Food and Drug Administration (FDA) has granted zolbetuximab Priority Review for the treatment of gastric cancer (GC) and gastro-esophageal junction cancer (GEJC), underscoring the significant unmet medical need.
Astellas has projected peak annual sales of zolbetuximab to be between US$600 million and US$1.3 billion. The FDA's decision on zolbetuximab is anticipated in January 2024. While Arovella's CLDN18.2-iNKT program is still in the preclinical phase and has yet to prove its efficacy, the sales projections for zolbetuximab indicate a promising market for FDA-approved therapies targeting CLDN18.2.
Arovella CEO and MD Dr Michael Baker commented: “We are very excited to have licensed the CLDN18.2 mAb sequence for use in cell therapy. Sparx has completed excellent work demonstrating the superior activity of its CLDN18.2 mAb, and also its robust safety and specificity. CLDN18.2 is an exciting target, generating a lot of interest globally. Arovella will be the only company in the world developing a CAR-iNKT cell therapy targeting CLDN18.2. The natural benefits that iNKT cells may bring to solid tumours, combined with the CLDN18.2 CAR, is a compelling concept for cancer patients.”
In comparison to an internally manufactured version of zolbetuximab, SPX-101 has demonstrated higher target affinity, specificity, and anti-tumour activity in mouse models.
Arovella plans to utilise the SPX-101 sequence to produce CLDN18.2-targeting chimeric antigen receptor invariant natural killer T (CAR-iNKT) cells. These cells will be developed for the treatment of gastric cancer (GC), gastro-esophageal junction cancer (GEJC), and pancreatic cancers. Employing the antibody to create CAR-iNKT cells capable of direct cancer cell eradication is anticipated to yield enhanced cancer-killing properties compared to using the antibody alone.
CLDN18.2 in Focus for Addressing Critical Cancer Types
CLDN18.2 is a protein notably present in gastric cancers (GC), gastroesophageal junction cancers (GEJC), pancreatic cancers (PC), and other solid tumours. The medical needs in treating these types of cancer remain significant. Annually, over one million new GC and GEJC cases are diagnosed worldwide, resulting in around 789,000 fatalities. This places it as the fourth leading cause of cancer-related deaths. In 2020, the number of new PC cases globally was around 496,000, with an estimated 466,000 deaths. Stage 4 pancreatic cancer has a particularly poor prognosis, boasting a five-year survival rate of just 1%.
The global market for gastric cancer treatments stood at $2.1 billion in 2021 and is forecasted to grow to $10.7 billion by 2031, with a compound annual growth rate (CAGR) of 17.9% from 2022 to 2031.
CLDN18.2's expression is limited in healthy tissues, which mitigates the risk of off-target effects for treatments targeting this protein. When CLDN18.2 does appear in healthy tissue, it is usually concealed in tight cellular junctions, making it inaccessible to chimeric antigen receptor invariant natural killer T (CAR-iNKT) cells. However, the protein becomes exposed during tumour development, making it a viable target for treatments such as CAR-iNKT cells. Moreover, CLDN18.2 continues to be expressed even after malignant transformation, making it prevalent in both primary gastric cancers and metastases.
Key terms of the licence agreement
The licensing agreement is effective immediately and imposes no immediate material financial impact on the Company. Initial capital requirements for proof-of-concept and viability assessments are estimated to be less than A$500,000 over the next year, funded from Arovella's existing cash reserves. Subsequent development costs will be assessed after data collection.
Payment terms include an upfront fee of A$300,000 in equity with a 12-month escrow. Stage-gated, industry-standard milestone payments will be made in both cash and equity. The upfront fee equates to 4,347,826 shares at a five-day volume-weighted average price (VWAP) of A$0.069 each. Additional contingent milestone equity payments total A$0.9 million, or 13,043,478 shares at the current VWAP. Contingent cash milestone payments could reach up to US$14 million, largely hinging on US Food and Drug Administration (FDA) approval.
Sparx Therapeutics CEO and MD, Gui-Dong Zhu, commented: “Our partnership with Arovella represents a transformative phase in advancing mAb-based therapies. Arovella's cutting-edge CAR-iNKT platform, encapsulating advanced techniques for in vitro expansion and post-infusion persistence of iNKT cells, underscores their leadership in this domain. We profoundly acknowledge CLDN 18.2-iNKT cell therapy as a groundbreaking paradigm in oncological therapeutics.”