Roche Will Work With Oryzon on Cancer-Suppressing Genes

Roche Holding AG (ROG) agreed to buy the rights from Spain’s Oryzon Genomics SA to an experimental drug that’s meant to switch on genes that block the growth of cancer, a new area in the crowded field of potential oncology therapies.

Roche will pay Barcelona-based Oryzon $21 million up front and for meeting near-term targets, plus payments that may exceed $500 million if the drug meets other goals. Basel, Switzerland-based Roche will also pay royalties if the compound makes it to the market. Oryzon will consider opportunities in coming months for an initial public offering, including in the U.S., Chief Executive Officer Carlos Buesa said in a phone interview.

The purchase gives Roche its first drug in human testing in the field of epigenetics, in which scientists try to change the way genes behave without altering the DNA itself. Roche is pushing to stay atop the field of cancer, where it has led with the Herceptin, Rituxan and Avastin medicines even as it struggled to win approval for drugs for other types of diseases.

“We believe we are first in class, potentially best in class,” with Oryzon’s ORY-1001 blocker, Stefan Frings, Roche’s head of oncology partnering, said in a telephone interview. “It’s an opportunity to really be one of the first companies out there.”

Roche also said today it will buy IQuum Inc., a Marlborough, Massachusetts-based maker of molecular-diagnostics products, for $275 million in cash and potential additional payments of as much as $175 million. IQuum’s technology lets health workers perform tests in a clinical setting rather than sending samples to a lab. The company’s influenza test has been approved in the U.S. and in Europe, Roche said.

Partnering Team

European regulators gave Oryzon’s molecule, which blocks an enzyme called LSD1, orphan-drug status last August for the treatment of acute myeloid leukemia. That status, generally given to medicines for rare illnesses, comes with benefits including a decade of market exclusivity.

For patients with that type of leukemia, Oryzon’s drug might turn on genes that stop abnormal white blood cells from proliferating in their bone marrow and blood, the European Medicines Agency said when it gave the drug orphan status.

Formerly Roche’s head of medical affairs in oncology, Frings helped lead late-stage development of Kadcyla, Roche’s heir to the breast cancer medicine Herceptin, and Gazyva, a potential successor to the leukemia and lymphoma drug Rituxan. Frings has moved to the partnering unit to help build the drugmaker’s earlier-stage portfolio from the outside, hired by head of partnering Sophie Kornowski-Bonnet.

External Partnerships

The two work together with John Reed, who last year was appointed as the head of pharma research and early development, or pRED. Reed has pushed for collaboration at early stages with outside groups. Reed told Nature Reviews Drug Discovery, an academic journal, in February that he wants about a third of the pRED unit’s drug discovery to be through external partnerships in the long term, up from about 15 percent now.

The deal with Oryzon also includes an earlier-stage component: the Spanish company will collaborate for two years with Roche’s newly opened Translational Clinical Research Center in New York. Roche’s developers will take projects born out of Oryzon’s labs into clinical trials in New York.

“This is the first time we’re bringing a project into the TCRC, and we’re extremely excited about this,” Kornowski-Bonnet said in a telephone interview.

Oryzon is “looking very attentively to the U.S. market,” including for possibilities for a public listing, Buesa said. The company is exploring several locations in the U.S. for creating an affiliate, he said.

The LSD1 molecule is still in early stages of patient trials. Oryzon began an initial patient study this year, according to its website. Roche will be responsible for moving the drug into tests in bigger groups of patients.

Roche’s Genentech unit also has an epigenetics partnership, signed in 2012 with Constellation Pharmaceuticals Inc. for a scientific collaboration that hadn’t begun patient trials yet.

To contact the reporter on this story: Naomi Kresge in Berlin at nkresge@bloomberg.net

To contact the editors responsible for this story: Phil Serafino at pserafino@bloomberg.net Kristen Hallam, John Bowker, Phil Serafino

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