Instil Bio, Inc., a biotechnology company specializing in biological products, announced today that it has entered into a significant agreement with ImmuneOnco Biopharmaceuticals. According to the filing with the Securities and Exchange Commission, the deal was formalized on Thursday, August 1, 2024.
Under the terms of the collaboration, Instil Bio's subsidiary, SynBioTx, Inc., has secured an exclusive license to develop and commercialize bispecific antibodies targeting PD-L1 and VEGF, including the candidate IMM2510, as well as monoclonal antibodies against CTLA-4, such as IMM27M. These rights extend outside of Greater China, where ImmuneOnco maintains its development and commercialization rights.
The financials of the agreement include an upfront payment to ImmuneOnco of $10 million, with additional potential near-term payments totaling up to $50 million. Moreover, the deal could yield up to $2.1 billion for ImmuneOnco based on future commercial, development, and regulatory milestones. This includes up to $270 million in longer-term milestones and up to $1.8 billion in commercial milestones. Furthermore, ImmuneOnco is set to receive royalties on global net sales outside of Greater China, ranging from single-digit to low double-digit percentages.
The royalty term is slated to end on a product-by-product and country-by-country basis, depending on the later of three events: ten years following the first commercial sale, patent expiration, or the end of regulatory exclusivity in each country.
Both parties have outlined termination rights within the agreement. ImmuneOnco can terminate the contract if SynBioTx challenges the validity of a licensed patent, unless such challenge is retracted or the sublicensing agreement is ended. SynBioTx also holds the right to terminate the agreement, either entirely or on a product or country basis, with 180 days' notice.
This partnership marks a significant step for Instil Bio as it expands its portfolio and presence in the antibody therapy space. The detailed terms of the Collaboration Agreement will be provided in Instil Bio's upcoming Quarterly Report on Form 10-Q for the fiscal quarter ending June 30, 2024. The information in this article is based on a press release statement.
In other recent news, Instil Bio, Inc. has seen several key developments. The biotechnology firm has formed a significant partnership with ImmuneOnco Biopharmaceuticals, securing an exclusive license to develop and commercialize antibodies targeting PD-L1 and VEGF, which includes candidates like IMM2510 and IMM27M. The agreement, which extends beyond Greater China, could potentially yield up to $2.1 billion for ImmuneOnco based on future milestones.
In addition to this, at the 2024 Annual Meeting of Stockholders, Instil Bio reelected R. Kent McGaughy, Jr. and Dr. Gwendolyn Binder to its board of directors. The company also ratified Deloitte & Touche LLP as its independent registered public accounting firm for the fiscal year ending December 31, 2024.
In a strategic shift, Instil Bio halted the clinical development of its ITIL-306 program, leading Jefferies to downgrade its stock rating from Buy to Hold. The company is now exploring manufacturing feasibility for '306 with a China-based partner, potentially initiating investigator-initiated trials in non-small cell lung cancer. Instil Bio is also actively seeking to acquire novel candidates to address diseases with significant unmet medical needs.
InvestingPro Insights
Instil Bio, Inc.'s strategic licensing agreement with ImmuneOnco Biopharmaceuticals represents a pivotal move for the company as it aims to strengthen its footing in the antibody therapy market. With a current market capitalization of $80.32 million, the company's financial position is crucial for investors keeping an eye on its ability to sustain such expansive deals. According to InvestingPro data, Instil Bio's operating income shows a significant deficit of -$76.33 million for the last twelve months as of Q1 2024, underscoring the challenges the company faces in generating profitability from its operations.
InvestingPro Tips suggest that while Instil Bio holds more cash than debt, indicating some financial flexibility, the company is quickly burning through cash and suffers from weak gross profit margins. These factors are critical as Instil Bio navigates the costly waters of biotechnology development and commercialization. Analysts have expressed concerns, noting that the company is not expected to be profitable this year and has not been profitable over the last twelve months. Moreover, the company's valuation implies a poor free cash flow yield, which could impact investor sentiment.
On a positive note, Instil Bio's liquid assets exceed its short-term obligations, providing some reassurance of financial stability in the near term. Additionally, the company has experienced a strong return over the last month, with a 1 Month Price Total Return of 18.25%, reflecting investor optimism following recent developments. However, it's worth noting that Instil Bio does not pay a dividend to shareholders, which may be a consideration for income-focused investors.
For those seeking further insights and analysis, InvestingPro offers additional tips on Instil Bio, which can be found on the platform's dedicated section for the company at https://www.investing.com/pro/TIL. These tips can provide a deeper understanding of the company's financial health and market position, aiding investors in making more informed decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.