X- Chem deal-making continues apace

Company inks collaboration with Ono Pharmaceutical for oncology target drug leads

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WALTHAM, Mass.—A multitarget drug discovery collaboration is now underway between X-Chem Inc. and Ono Pharmaceutical Co. Ltd., with a focus on cancer. Per the agreement, X-Chem will use its proprietary DEX libraries in search of new drug leads against a number of high-impact oncology targets, and Ono will have the option to license identified lead compounds and will assume responsibility for further development and commercialization of any resulting programs. 
Though no specific financial details were released, X-Chem will receive an upfront payment in addition to research and licensing fees, and also stands to receive additional payments tied to the achievement of preclinical and clinical development markers and regulatory milestones, as well as sales royalties.
“Ono identified X-Chem as the partner of choice for the generation of new drug leads for several high-priority targets in our portfolio,” said Dr. Hiromu Habashita, corporate officer and executive director of discovery and research at Ono. “We are excited to work with X-Chem on identifying and developing the next generation of innovative oncology treatments.”
X-Chem’s DEX (DNA-Encoded X-Chem) library boasts more than 120 billion small molecules, and the company claims that thanks to the library’s size and diversity, it “can discover multiple series of novel, potent and selective lead compounds at an unprecedented rate of success against a wide range of targets, including some that previously failed using conventional screening methods.”
As X-Chem explained in a press release, “The library is screened as a mixture using affinity-based binding to a target of interest. Certain rare molecules in the library that bind to the target can be ‘fished out’ while the rest of the molecules are washed away. DNA sequencing methods are then used to detect molecules that are enriched when bound to the target. The diverse nature of the library produces multiple families or clusters of related molecules that bind to the target, forming a basis for emergent structure-activity relationships. Structure-activity relationships are typically used by medicinal chemists to guide iterative chemical maturation of a molecule into a drug.”
“We are delighted to partner with Ono, one of the oldest pharmaceutical companies in the world and an important developer of innovative drugs,” remarked Dr. Rick Wagner, CEO of X-Chem. “This is our third partnership with a Japanese company in the last three months, signaling the broad global interest of the pharma industry in X-Chem’s DEX platform for finding novel drug leads.”
Those other two partnerships include other big names in the industry. On March 20, X-Chem announced a strategic collaboration with Astellas Pharma Inc. The drug discovery deal will focus on discovering novel lead compounds for drug targets of interest to Astellas using X-Chem’s DEX libraries. The companies will be looking at targets in several therapeutic areas, and X-Chem noted that the deal was its “most expansive first-time alliance with a pharmaceutical company.” Under the terms of the partnership, Astellas will pay X-Chem $16 million up front, with the potential for research funding and license and option fees. X-Chem is eligible to receive royalties on any resulting products, and milestone payments could total more than $100 million per target. The agreement gives Astellas the option to license compounds identified through this work.
Prior to that, in mid-February, X-Chem expanded its collaboration with Janssen Biotech Inc., one of the Janssen Pharmaceutical Companies of Johnson & Johnson, for the discovery of new drug leads for treating inflammatory diseases. The original agreement began in December 2014, and this expansion will leverage the DEX platform to identify novel modulators for select disease targets, and comes after Janssen licensed several series of small molecules in 2016 that were discovered by X-Chem.

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