Boehringer Ingelheim and Epizyme announced a partnership on Thursday to develop oncology treatments.The partnership entails developing, researching and commercializing small molecule inhibitors directed for two epigenetics targets as potential cancer therapies.

Boehringer Ingelheim and Epizyme (NASDAQ:EPZM) announced a partnership on Thursday (November 15) to develop oncology treatments.

The partnership entails developing, researching and commercializing small molecule inhibitors directed for two epigenetics targets as potential cancer therapies. The primary goal is to focus on lung and other solid tumor cancers in patients with defined mutations and sub populations which have an unmet need in precision treatments.

Epizyme will receive US$15 million as an upfront payment from Boehringer Ingelheim and an additional US$5 million in research funding in 2019. Altogether, Epizyme could receive up to US$280 million in additional payments for research, development, regulatory and commercial milestones.

Both companies will jointly research and develop a helicase program—a known system to separate DNA or RNA molecules using ATP energy. Epizyme will fund a portion of the global development costs for this program while retaining US profits and tiered royalties on ex-US sales.

The companies will also share US commercialization responsibilities, while Boehringer Ingelheim will lead worldwide development and commercialization outside of the US.

Other terms of the partnership include both companies researching the helicase and histone acetyltransferase (HAT) program. For this program, Epizyme is also eligible to receive tiered royalties on worldwide sales.

The targets are enzymes in the HAT families. When dysregulated, these enzymes are linked to cancer development where there is a high unmet need in this category.

Included in the family of HATs is 18 enzymes and other modifications that affect how histones interact with DNA. All of these changes influence gene expression.

Clive Wood, senior corporate vice president of discovery research at Boehringer Ingelheim, said in the press release the company’s plans for the collaboration is to enable “a new generation of precision medicines.”  

Robert Bazemore, CEO at Epizyme, shared similar sentiments to Wood. These two targets had previously been undruggable, and this partnership will validate the method of epigenetics for oncology, he said in the release.

Epigenetic modifications affect how genes are regulated. According to the press release, more than half of cancers can begin from functional problems in epigenetic modification. Both targets play a role in cancer and have patient stratification biomarkers. Patients can be identified from these biomarkers to see if they may benefit from these treatments.

Boehringer Ingelheim is a private global pharmaceutical company which works in three areas: animal health, biopharmaceuticals and human pharmaceuticals. The company’s primary focuses in oncology are lung and gastrointestinal cancer.

Epizyme is a clinical-stage company developing treatments with through unique epigenetic therapies. Tazemetostat is the company’s lead product candidate in development for solid tumors and blood cancers.

Investor Takeaway

Epizyme’s stock price made a 3.44 percent gain over the trading period on Thursday to close at US$7.41.

According to TipRanks, Oppenheimer analyst Leah Cann released a note to investors and assigned the company a “Buy” position on the company with a price target of US$27.

“Upfront payments and milestones [from this collaboration] could provide upside to our outlook and reduce our estimated additional capital needs to commercialize Epizyme’s lead asset Tazemetostat,” she said in the note. The collaboration has reduced Cann’s estimate of the company’s capital need for millions of dollars.

Investors can expect to hear more about this collaboration in 2019 when the company receives the next milestone payment for research and development.

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Securities Disclosure: I, Gabrielle Lakusta, hold no direct investment interest in any company mentioned in this article.


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