Cambridge-based Rheos Medicines (Rheos) inked a deal worth nearly $800 million for an R&D pact. The biopharmaceutical company harnessing insights in immunometabolism in the quest to create a new class of therapeutics for patients with severe autoimmune disorders, inflammatory diseases and cancer entered into an exclusive worldwide collaboration, option, and license agreement with Roche to discover, develop and commercialize novel therapeutics in the field of immunometabolism.
Who is Rheos Medicines?
They are a biopharmaceutical company harnessing insights in immunometabolism in the quest to create a new class of therapeutics for patients with severe autoimmune disorders, inflammatory diseases, and cancer. They are seeking to develop novel medicines that modulate metabolic pathways in immune cells to treat disease. Their approach targets the underlying cellular metabolism of immune cells to redirect the fate and function of specific cell types to treat immune-mediated disease.
By simultaneously identifying new targets and characterizing biomarkers of disease, they are, for the first time, bringing precision to the treatment of immune-mediated diseases. Supporting this effort is the talent required: leading scientists from the field of immunometabolism as well as clinicians with a deep understanding of the heterogeneity of immune-mediated disease plus an experienced biotech leadership team.
Who are its Investors? And How Much?
What are the Deal Terms with Roche and Who Negotiated on Rheos Behalf?
The company will receive an upfront cash payment of $42.5 million upon execution. It will be eligible to receive up to about $90 million for specified research and preclinical development milestones as well as option fees. They will be eligible for up to an additional $660 million in specified development, regulatory, and sales-related milestones across the programs and tiered royalties on net sales. For co-developed and shared commercial products, Rheos will be entitled to additional financial compensation within the U.S. and ex-U.S. commensurate with the share of financial investment in development and commercialization.
Wilson Sonsini represented Rheos.
Essentially the way this deal is structured, Rheos serves Roche as an outsourced research and development arm with an emphasis on the emerging field of immunometabolism. Wilson Sonsini reported that Rheos would, on behalf of Roche, conduct exclusive research effort to find new drugs in immunometabolism that modify the fate or function of certain human immune cells. Rheos is responsible for the discovery efforts in the collaboration. And Roche commits to exclusively license a defined number of programs emerging from this collaboration.
Transactional Attorneys representing Rheos
Wilson Sonsini partner Farah Gerdes and associate Sarah Parker.
What Market are they Targeting?
Patients with immune-mediated diseases—a growing and already large market in Western society with an estimated 7-10% of the population with autoimmune diseases; and 5-7% of the population with immune-mediated inflammatory diseases. Investor Third Rock put this group together as they understood recent advances in treatment aside, there remains a significant unmet need for novel treatments. More specifically, there is a great need for an understanding of how variations in immune cell metabolism underlie patient heterogeneity, which introduces an opportunity to bring more precise treatments to patients.
Who are its Investors? And How Much?
Who are its Founders?
· Richard Flavell, PhD, Sterling Professor of Immunobiology, Yale University, Investigator, Howard Hughes Medical Institute (world-renown immunologist)
· Edward Pearce, PhD, Senior Group Leader, Max Planck Institute of Immunobiology and Epigenetics
· Erica Pearce, PhD, Max Planck Institute of Immunobiology and Epigenetics (world leader in T cell metabolism and how metabolic pathways tune T cell function and fitness)
· Ken Smith, MD, PhD, Professor of Medicine and Head of the Dept. of Medicine, the University of Cambridge (expert in biomarker identification and predicting prognosis in patients with autoimmune disease)
· William St. Clair, MD Professor of Medicine and Immunology, Duke University Medical Center (former President of the American College of Rheumatology and expert in translational immunology and design of clinical trials)
What is the IP and Pipeline?
The upstart has already developed a product engine that offers unprecedented insight into the drivers of immune-mediated diseases by characterizing how different immune cell types impact disease progression in different patient subpopulations. The “Rheos product engine” enables a precision medicine approach to the treatment of immune-mediated diseases. They use the latest technological advances, including DNA sequencing, transcriptional, and metabolomic profiling—along with the incorporation of primary patient samples to offer an integrated immune cell metabolism and physiology platform.
Core Intellectual Property
Central to their product engine is a proprietary Immune Cell Encyclopedia (ICE), which maps the metabolic pathways used by different types of immune cells to regulate their fate and function in disease and health. Their initial focus of Rheos’s product pipeline is on therapeutics that target CD4 and CD8 T cell subtypes, which are involved in diseases such as inflammatory bowel disease, psoriasis, vitiligo, and in immune-oncology applications. These immune cell subtypes represent critical elements to disease pathogenesis. The investors reported in the introductory press release that Rheos’s product engine is providing insight into how these cells drive immune response in disease.
The company will use computational tools to identify select immune cells and their effect on particular diseases. By building their “immune cell encyclopedia,” they build a valuable catalog of relationships—comparing immune cells associated with select disease to those in a state of health. This master catalog also identifies a particular immune cell function in treating specific diseases and the metabolic pathway that modulates the cell. Hence, if they can pinpoint the metabolic profile of a particular targeted immune cell and how and why it changes with disease, they are then in a position to potentially develop a small molecule drug targeting the specific cell. Their ultimate goal of any drug developed will be to “tune” the metabolic pathway in such a way that they can restore immune cells to a healthier state.
There is precedent here, as discussed by Frank Vinluan back in 2018 with Xconomy, as another Third Rock portfolio company Agios Pharmaceuticals (AGIO) developed a cancer drug targeting a tumor’s metabolism. With partner Celgene, they received FDA approval for enasidenib (Idhifa) as a treatment for acute myeloma—a blood cancer. This was the first metabolism drug to be commercialized out of Agios R&D efforts. Note that Rheos’s CTO Edward Diggers was formerly with Agios.