Novartis has licensed a potential first-in-class immuno-oncology programme from XOMA in a deal potentially worth more than $500 million, sending the latter’s shares up nearly 50%.

Under the deal, Novartis has picked up exclusive global development and commercialisation rights to XOMA’s anti-transforming growth factor-beta (TGFb) antibody programme, which is showing early promise in the treatment of cancer.

TGFb is a potent immune suppressive cytokine involved in many cellular processes, including inhibition of cell growth and immune suppression, elevated levels of which could be behind the progression of various diseases, including advanced metastatic cancer and fibrosis.

Three isoforms of TGFb exist in humans: 1, 2 and 3. According to XOMA, inhibiting TGFb1 and 2 while sparing TGFb3 could reduce tumour-protecting regulatory T cells while allowing for the development of cytotoxic immune responses enhanced by TGFb3.

XOMA 089 has been developed to do exactly this, and data have shown activity against tumour growth in preclinical models of head and neck cancer as well as breast cancer and breast cancer metastasis. Preclinical data also suggest that it may be synergistic with PD1 inhibition.

Novartis is paying XOMA an upfront fee of $37 million for the programme, and up to $480 million if development, regulatory and commercial milestones are met. The US biotech is eligible to receive royalties on product sales that range from the mid-single digits to the low double digits.