Novartis tackles immuno-oncology with a $750M Aduro deal for new R&D group

Novartis ($NVS), a leader among companies using the immune system to fight cancer, is betting up to $750 million on a promising therapeutic approach from Aduro Biotech, widening its arsenal of potential treatments. And the pharma giant coupled the deal with the announcement that it recruited Dana Farber’s Glenn Dranoff to run a new in-house R&D group for cancer immunotherapies that will recruit about 50 investigators in the coming months.

Under the agreement, Novartis is paying $200 million up front to kick off a collaboration on small-molecule therapies that target a pathway called STING, or stimulator of interferon genes. Aduro’s preclinical candidates are cyclic dinucleotides–chemicals naturally expressed by bacteria and immune cells–that stimulate a STING response and thereby help the body’s natural defenses better recognize and attack tumors, the company said.

Aduro is in line for up to $500 million in milestone payments through the life of the partnership, and Novartis is taking a 2.7% stake in the company for $25 million while promising to invest another $25 million down the road. If everything goes according to plan and the pair get some products on the market, Aduro will handle sales in the U.S. while Novartis manages the rest of the world. The pair will share American profits, and Novartis will pay Aduro a mid-teens royalty on all international sales. […]

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