Startups, BioPharma

Arcus Biosciences closes $107M Series C round as industry hunts for blockbuster immunotherapy combinations

New research by the Cancer Research Institute puts the number of industry-wide combination trials at 1,105.

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Imagine cancer as a fugitive, hiding in a rundown warehouse. The police (aka the immune system) patrol the surrounding streets, oblivious to the deadly agent holed up inside.

Checkpoint inhibitors, on the market since 2010, help the good guys win. The drugs expose the fugitive’s location, allowing police to storm the warehouse. Sometimes they catch the cancer. More often than not it escapes.

Additional therapies are needed to double-down on the tumor and to close any potential escape routes.

On Monday, Arcus Biosciences closed a $107 million Series C round for its mission to provide that back-up support. The round was led by GV (formerly Google Ventures), with a further 13 new or existing investors named in the company’s news release. Arcus has now raised a mighty $227 million in equity capital since it was founded in 2015.

The Hayward, California-based startup has both small molecule and antibody candidates in its pipeline. The Series C will be used to advance two of those into new clinical trials: AB928, a dual adenosine receptor antagonist, and AB122, a PD-1 antibody that helps stimulate the immune response, according to the company statement.

Arcus is not alone.

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Checkmate Pharmaceuticals, another 2015 startup, is working to boost the immune response to capitalize on the tumor being exposed. It has so far raised $47 million through two venture rounds.

And just last week, San Diego, California-based OncoSec Medical saw its shares skyrocket with the release of positive Phase 2 data in melanoma, combining its ImmunoPulse IL-12 platform with Keytruda. ImmunoPulse IL-12,

In fact, there is such huge potential in checkpoint inhibitors that Merck’s Keytruda has more than 600 clinical trials active and/or recruiting on clinicaltrials.gov. Bristol-Myers Squibb’s Opdivo has just over 500. New research by the Cancer Research Institute, shared by Endpoint News, puts the number of industry-wide combination trials at 1,105.

Arcus itself has been making deals. In August, the company licensed an anti-PD-1 antibody from WuXi Biologics and Gloria Pharmaceuticals. That deal was worth $18.5 million upfront and up to $816 million in milestone payments and royalties if everything goes well.

It’s big money, which raises a potential issue in the years ahead. Cancer treatments are already expensive. Without discounts and rebates, Keytruda and Opdivo cost around $150,000 per year. If a second or third drug is added to the cocktail, the burden on the healthcare system could be even worse. On the flipside, if it can push more patients into remission, other costs can be spared. It’s not cheap cornering and eliminating these fugitive cancer agents, especially if they’ve spread.

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