Leap Therapeutics, Inc. (Nasdaq: LPTX), a biotechnology company developing targeted immuno-oncology therapeutics, and BeiGene, Ltd. (Nasdaq: BGNE; HKEX: 06160), a commercial-stage biopharmaceutical company focused on developing and commercializing innovative molecularly-targeted and immuno-oncology drugs for the treatment of cancer, today announced an exclusive option and license agreement for the clinical development and commercialization of DKN-01, Leap's anti-Dickkopf-1 (DKK1) antibody, in Asia (excluding Japan), Australia, and New Zealand. Leap will retain exclusive rights for the development, manufacturing, and commercialization of DKN-01 for the rest of the world. In addition, Leap announced entering into an agreement for a $27 million equity financing with BeiGene and two institutional investors.
BeiGene Strategic Collaboration
"We are excited about the potential to combine our anti-PD-1 inhibitor tislelizumab with DKN-01 as there have been promising signals in a biomarker-defined population of gastric cancer patients in combination with checkpoint blockade," commented Yong (Ben) Ben, M.D., Chief Medical Officer, Immuno-Oncology at BeiGene. "This collaboration with Leap is another example of our commitment to developing novel treatments to address unmet medical needs in Asia and around the world."
Under the terms of the agreement, Leap will receive an upfront cash payment of $3 million from BeiGene in exchange for granting BeiGene an option to an exclusive license to develop and commercialize DKN-01 in Asia (excluding Japan), Australia, and New Zealand, and will be eligible to receive an additional payment from BeiGene upon BeiGene's exercise of the option following initial proof-of-concept studies. Additionally, Leap is eligible to receive payments from BeiGene based upon the achievement of certain development, regulatory, and sales milestones for a total deal value of up to $132 million, together with tiered royalties on any product sales of DKN-01 in the licensed territory. BeiGene will also make a $5 million equity investment in Leap as part of the contemporaneous $27 million equity financing.
"Securing a collaboration to further develop DKN-01 has been our top strategic priority, and we are excited to begin working with BeiGene, a global leader in oncology," said Christopher K. Mirabelli, Ph.D., President and Chief Executive Officer of Leap Therapeutics. "BeiGene is the ideal partner for Leap given its extensive experience in the development of oncology drugs throughout Asia Pacific, where its expertise and product breadth can help us in our efforts to address serious unmet medical needs in esophagogastric, gynecologic, and other cancers."
During the option period, Leap has agreed to study the combination of DKN-01 and tislelizumab. Leap plans to evaluate DKN-01 with tislelizumab in approximately 40 patients with second-line gastric cancer (GC) / gastroesophageal junction cancer (GEJ) whose tumors express high levels of DKK1 to build upon the the positive clinical experience of DKN-01 in combination with PD-1 inhibitors in these patients. In addition, Leap plans to evaluate the combination of DKN-01 with tislelizumab and chemotherapy in approximately 20 patients with first-line GC/GEJ. Leap expects to initiate these clinical trials in the first half of 2020.
Equity Financing
In connection with the licensing agreement with BeiGene, Leap has also entered into a securities purchase agreement to issue and sell in a private placement 1,421,801 shares of newly designated Series A mandatorily convertible preferred stock to a lead institutional investor and 1,137,442 shares of newly designated Series B mandatorily convertible preferred stock to BeiGene and Perceptive Advisors, each at a price of $10.55 per share, upon the closing of the equity financing. The preferred stock price reflects a common stock equivalent price of $1.055, the closing price for Leap's common stock on the Nasdaq Global Market on the day of pricing, January 2, 2020. At the closing, the holder of Series A mandatorily convertible preferred stock will also receive a special voting preferred share that will entitle it to elect one member of Leap's Board of Directors. Upon approval by the stockholders of Leap, the Series A mandatorily convertible preferred stock will be ...
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