Leap Therapeutics jumps into growing Claudin18.2 field by buying Flame Biosciences

Flame Biosciences gave up on its IL-1ß inhibitor last fall after Novartis’ asset in the class failed multiple studies. To save itself, the biotech is selling to Leap Therapeutics.

Not in the foreground of the picture? The IL-1ß inhibitor, known as FL-101. Instead, Leap’s buyout focuses on anti-Claudin18.2 antibody FL-301 and two preclinical antibodies, including an anti-Claudin18.2/CD137 bispecific and anti-GDF15 monoclonal.

At the end of last year, Flame — backed by the likes of Samsara BioCapital and Cormorant — still had about half of the $100 million investment it disclosed in the fall of 2020. Leap acquired that approximately $50 million net cash, which will boost the combined companies’ cash heap to about $115 million, enough to keep the lights on through mid-2025, according to the Tuesday deal press release. The deal already closed, the companies said.

Flame shareholders will own about 58% of the outstanding shares, Leap said. Leap landed on Nasdaq more than five years ago after a reverse merger with regenerative med company Macrocure. Shares of the penny stock $LPTX were down about 9% before Tuesday’s opening bell.

Douglas Onsi

“Acquiring FL-301 is a perfect fit with our vision of developing novel biomarker-targeted therapies for cancer patients, that is represented by our DKN-01 program. We believe that DKK1 and Claudin18.2 will become important patient selection biomarkers in gastric cancer, alongside HER-2 and PD-L1 expression, with the potential for delivering personalized medicines to patients who currently have poor survival outcomes,” Leap president and CEO Douglas Onsi said in a statement.

On an investor call, he said Leap and Flame have been talking for “well over a year.”

Leap won’t focus on taking forward FL-101 and another anti-IL-1ß antibody, known as FL-103. Flame thought if it could inhibit the cytokine key to inflammation, then it could help reduce cancer. But Novartis’ drug canakinumab repeatedly showed that wasn’t the case, so Flame halted work. Flame’s shareholders can still get some cash on the assets. If Leap finds licensees or buyers, then 80% of after-tax net proceeds will go to Flame shareholders.

With the new cash, Leap will focus on its anti-DKK1 monoclonal antibody DKN-01, which is in Phase II trials in gastric, endometrial and colorectal cancer patients. The studies include combos with BeiGene’s tislelizumab and Roche’s Tecentriq.

The second focus will be on FL-301, to which Flame acquired the ex-China rights in 2021. NovaRock, which is testing the drug in China, received $7.5 million upfront and stands to earn another $172.5 million in development biobucks and $460 million in sales milestones.

Onsi said Leap will await signal from NovaRock’s dose-escalation study of the drug in China before moving forward with its own trial in the US. He described a roadmap of going right into higher doses of FL-301 in “more commercially and clinically relevant combinations.”

FL-301 focuses on Claudin18.2, the target of multiple biotechs that are using monoclonal antibodies, bispecifics, CAR-T cell therapies and T-cell engagers. The list includes AstraZeneca-partnered Harbour BioMed, Elevation Oncology-allied CSPC Megalith, Astellas, Amgen, CARsgen and others.

The Astellas antibody, which comes from the BioNTech founders, passed a Phase III last November. BioNTech is also in the Claudin18.2 field.

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