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Beaten-down biotechs pin hopes on drug-licensing deal

A pair of beaten-down Cambridge biotech companies are joining forces in a bid to revive a troubled blood-cancer drug development program — and their own flagging fortunes.

In a surprise move, Verastem Inc. said Wednesday it had licensed worldwide development and commercialization rights to an experimental treatment called duvelisib from Infinity Pharmaceuticals Inc. The deal came four months after Infinity reported disappointing data in a mid-stage clinical trial of duvelisib, prompting previous partner AbbVie Inc. to terminate their alliance.

The AbbVie collaboration could have fetched Infinity more than $800 million if the blood cancer drug was successful, but the licensing pact with Verastem comes with much less generous terms. Verastem didn’t have to pay anything upfront for the rights to the drug, and will pay just $6 million if a separate late-stage clinical trial meets its goals. If the drug is approved by regulators, it would owe Infinity another $22 million — plus sales royalties.

“It’s very back-end loaded, and that’s very attractive to us,” Verastem chief executive Robert Forrester said.

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The deal gives six-year-old Verastem its best shot at getting a cancer drug on the market in the next two years. The company reported last year that its own lead drug candidate didn’t work well enough to continue a clinical study of patients with a rare form of lung cancer. As a result, Verastem was forced to pare its workforce from 45 to 20, though it has since increased to 28 and may now hire more.

Infinity cut more than 150 jobs in two separate restructuring rounds after its setback with duvelisib and AbbVie’s withdrawal from the program in June, though Infinity pressed forward with clinical tests of the drug candidate in different sets of patients.

The company, founded in 2001, will eliminate more than half of its remaining 40 jobs, reducing its staff to 19, when Verastem takes over the blood-cancer drug program by the end of the year. Infinity will then work to develop on an earlier-stage cancer drug compound to treat solid tumors such as melanoma and non-small-cell lung cancer.

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“We’re really thrilled with this outcome,” Infinity chief executive Adelene Perkins said. “We were very focused on making sure we paved the path for duvelisib to go forward.”

Both companies were once high-flyers on the Nasdaq stock market, with Infinity trading above $48 a share and Verastem stock at nearly $18 in 2013. But they’ve both fallen more than 90 percent from their peaks. On Wednesday, Infinity tumbled more than 7 percent to $1.16 and Verastem dropped nearly 4 percent to $1.21.

Verastem will complete a late-stage trial of duvelisib in patients with a type of chronic lympohoyctic leukemia and report data in the first half of next year. If the results are promising, Verastem executives will meet with Food and Drug Administration regulators and potentially file a new drug application that could be ruled on in 2018.

Forrester noted that the FDA in 2014 approved another drug, called Zydelig, developed by California biotech Gilead Sciences Inc., which treats the same patient population. While the Gilead drug is also a pill, it’s prescribed in combination with an infused drug, which requires patients to go to a clinic. Verastem may seek approval of its blood-cancer drug as a monotherapy, meaning it wouldn’t have to be taken with other medicines.

Verastem will also test the drug in patients with other types of blood cancer, including T cell lymphomas and a type of non-Hodgkin lymphoma.

“Patients need a new therapy,” Forrester said, “and we hope to bring it to them.”


Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.

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