Juno and Fate announce strategic immunotherapy collaboration

Alliance utilizes Fate's hematopoietic cell programming platform to identify small molecule modulators for Juno's genetically engineered T cell immunotherapies

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SEATTLE and SAN DIEGO—Juno Therapeutics, Inc. and Fate Therapeutics, Inc. have executed a strategic research collaboration and license agreement to identify and utilize small molecules to modulate Juno's genetically-engineered T cell product candidates to improve their therapeutic potential for cancer patients. The collaboration brings together Juno's expertise in the development of chimeric antigen receptor (CAR) and T cell receptor (TCR)-based cellular immunotherapies and Fate's platform for programming the biological properties and in-vivo therapeutic potential of hematopoietic cells.
"A deep understanding of T cell biology is the basis of Juno's approach to creating best-in-class cellular immunotherapies," said Hans Bishop, CEO of Juno Therapeutics. "Partnering with Fate Therapeutics, and accessing its strong science and leading platform for modulating the properties of immunological cells, enables interrogation of new avenues of T cell manipulation and provides an opportunity to enhance the therapeutic profile of our genetically engineered T cell product candidates."
The two companies have signed on for a four-year research and development collaboration during which Fate will be responsible for screening and identifying small molecules that modulate the biological properties of engineered T cells. Juno will tackle the development and commercialization of engineered T cell immunotherapies incorporating Fate's small molecule modulators. Juno has the option to extend the exclusive research term for two years through an additional payment and continued funding of collaboration activities.
"We are excited to establish this strategic alliance with Juno, a company that shares our deep commitment to developing transformative cellular therapeutics for patients afflicted with life-threatening disorders," said Christian Weyer, M.D., M.A.S., president and CEO of Fate Therapeutics. "This partnership exemplifies the extension of our small molecule programming platform to additional hematopoietic cell types, such as T cells, as we continue to build and advance our innovative pipeline of programmed hematopoietic cellular therapeutic candidates."
Financial terms of the agreement include an upfront payment to Fate of $5 million and the purchase by Juno of one million shares of Fate common stock at $8.00 per share. Juno will fund all mutual collaboration activities for an exclusive four-year research term. For each product developed by Juno that incorporates modulators identified through the collaboration, Fate is eligible to receive approximately $50 million in target selection fees and clinical, regulatory and commercial milestones, as well as low single-digit royalties on sales. Fate retains exclusive rights to its intellectual property for all purposes outside of programmed CAR and TCR immunotherapies.
Juno's chimeric antigen receptor (CAR) technology genetically engineers T cells to recognize and kill cancer cells. Juno's CAR T cell technology inserts a gene for a particular CAR into the T cell, enabling it to recognize cancer cells based on the expression of a specific protein located on the cell surface. When the engineered T cell engages the target protein on the cancer cell, it initiates a cell-killing response against the cancer cell.
In a second development, Juno announced on May 11 that it has acquired Stage Cell Therapeutics GmbH, a privately held biotechnology company based in Munich and Göttingen, Germany. The transaction is seen as furthering Juno's strategy of being a world leader in process development and the manufacturing of cellular therapies. The acquisition provides Juno access to “transformative cell selection and activation capabilities, next generation manufacturing automation technologies, enhanced control of its supply chain, and lower expected long-term cost of goods,” the release announcing the acquisition stated. Juno plans to operate the acquired company, which employs 23 scientists, engineers, and other personnel, as a wholly owned German subsidiary under the name Juno Therapeutics GmbH. 
"This important acquisition is driven by our strategy to have best in class process development and manufacturing capabilities in support of our goal of developing next generation CAR and TCR products," said Juno’s Bishop. "We welcome our new colleagues in Germany to the Juno family, and we look forward to working together to develop and commercialize best in class therapies."
Juno made an upfront payment of €52.5 million in cash (approximately $59 million) and 486,279 shares of Juno stock to acquire the 95 percent of Stage not already owned by Juno. Juno is also obligated to pay success-based payments of up to €135 million based upon the achievement of development and commercialization milestones related to novel reagents (€40 million), advanced automation technology (€65 million), and Stage's existing clinical pipeline (€30 million).
The Stage acquisition is Juno’s latest move to fulfill its strategy of building a fully integrated biopharmaceutical company focused on revolutionizing medicine by re-engaging the body's immune system to treat cancer. Founded on the vision that the use of human cells as therapeutic entities will drive one of the next important phases in medicine, Juno is developing cell-based cancer immunotherapies based on chimeric antigen receptor and high-affinity T cell receptor technologies to genetically engineer T cells to recognize and kill cancer. Juno is developing multiple cell-based product candidates to treat a variety of B-cell malignancies as well as solid tumors. Several product candidates have shown evidence of tumor shrinkage in clinical trials in refractory leukemia and lymphoma conducted to date. Juno's long-term aim is to improve and leverage its cell-based platform to develop new product candidates that address a broader range of cancers and human diseases. Juno brings together innovative technologies from some of the world's leading research institutions, including the Fred Hutchinson Cancer Research Center, Memorial Sloan Kettering Cancer Center, Seattle Children's Research Institute, and The National Cancer Institute.
Since its founding, Fate Therapeutics has been dedicated to programming the function of cells ex vivo to improve their therapeutic potential. Using advanced molecular characterization tools and technologies, Fate's platform enables the identification of small molecule or biologic modulators that promote rapid and supra-physiologic activation or inhibition of therapeutically relevant genes and cell surface proteins, such as those involved in the homing, proliferation and survival of hematopoietic stem cells or those involved in the persistence, proliferation and reactivity of immunological cells. Fate utilizes its understanding of the hematopoietic system to rapidly assess and quantify the therapeutic potential of programmed hematopoietic cells in vivo, and applies its modulators to maximize the safety and efficacy of hematopoietic cellular therapeutics.
Fate Therapeutics' approach utilizes established pharmacologic modalities, such as small molecules, to program the fate and function of cells ex vivo. The company's lead product candidate, PROHEMA®, is an ex vivo programmed hematopoietic cellular therapeutic, which is currently in clinical development for the treatment of hematologic malignancies and rare genetic disorders in patients undergoing hematopoietic stem cell transplantation (HSCT). The company is also using its proprietary induced pluripotent stem cell platform to develop ex vivo reprogrammed hematopoietic and myogenic cellular therapeutics. Fate Therapeutics is headquartered in San Diego, CA.

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