Medivir: License Deal for Birinapant

Medivir announces a licensing deal for oncology project birinapant with US IGM Biosciences. The deal value is worth more than USD 350m, of which Medivir will receive USD 2.5m in upfront- and near-term milestone payments. Also, Medivir is entitled to tiered royalties up to mid-teens on net sales.

IGM Biosciences develops engineered IgM antibodies for cancer treatment. IGM will initiate a Phase I study to combine birinapant with the IGM antibody IGM-8444 that targets Death Receptor 5 to induce programmed cell death in cancer cells. According to the joint press release by Medivir and IGM, the combination has yielded “remarkable synergies” in preclinical models. As a reminder, birinapant also targets programmed cell death mechanisms and blocks so-called Inhibitor of Apoptosis Proteins (IAP). IGM has a pipeline in early clinical development but has a large market cap of USD 2.7bn and generated some buzz at ASH following promising early clinical results in lymphoma for another drug candidate.

The news puts birinapant in the limelight. We did not see a deal coming at this stage and have underestimated the interest for this asset following the disappointing results in colorectal cancer in 2019.  We do not know the full deal terms but believe the total value is a positive surprise even if the upfront payment is relatively modest.  Medivir will split the income from the deal with the original licensor of birinapant, Tetralogic, according to the renegotiated terms announced in December. It seems clear that the new agreement with Tetralogic has facilitated the partnership with IGM.

Medivir will hold a telephone conference later today, which might add some additional flavor to the news, including details on, e.g., clinical development plans.  In the meantime, we expect a robust initial rebound (20 percent+) in the share price as a reaction to the deal. We will review our assumptions for birinapant and other projects and expect to return with an update shortly.