Instil's stock sinks after it clears out pipeline, hands 2 drugs back to ImmuneOnco

Instil Bio’s hopes for its refreshed clinical pipeline appear to have ended in failure, with the U.S. biotech handing the rights to two drugs back to their original owner.

Dallas-based Instil secured the ex-China rights to the therapies from ImmuneOnco Biopharmaceuticals in August 2024 as a way to refill its pipeline after it scrapped its prior lead assets over the previous couple of years. That deal committed Instil to paying $50 million in upfront and near-term payments—with potentially up to $2 billion to follow in milestones.

The most advanced of the two drugs, dubbed IMM2510 or AXN-2510, is a bispecific antibody combining an anti-PD-L1 antibody with a vascular endothelial growth factor (VEGF) receptor “trap” that binds VEGF. The companies had touted IMM2510 as being a cut above other PD(L)1xVEGF antibodies in development due to its ability to bind multiple VEGF receptor ligands beyond VEGF-A.

At the time, IMM2510 had already completed a phase 1 dose escalation trial in patients with advanced solid tumors, demonstrating a response in patients with squamous non-small cell lung cancer whose cancer had not been effectively treated by PD-1 inhibitors.       

Since the licensing deal, ImmuneOnco has taken IMM2510 into a phase 2 study. Last July, preliminary data from the study suggested partial responses in 80% of squamous NSCLC front-line patients and in 46% of non-squamous NSCLC front-line patients.

Instil’s CEO Bronson Crouch said at the time that the data suggested IMM2510 had “potential for best-in-class efficacy in the promising PD-(L)1xVEGF bispecific antibody class.” Crouch also outlined plans for Instil to launch its own phase 1 study of the drug in the U.S. before the end of the year.

But Instil has clearly had a change of heart. In a curt press release this morning, the biotech said it had “decided to discontinue clinical development” of IMM2510. The company didn’t offer any details about the rationale for this decision.

With the move, ex-China rights to the candidate will revert to ImmuneOnco.

By ending its agreement with ImmuneOnco, Instil is also handing back the other asset from the licensing deal: IMM27M, a next-gen anti-CTLA-4 antibody that ImmuneOnco had taken into phase 1 trials as a potential tumor treatment.

Instil’s investors didn’t appear happy with the decision, sending the biotech’s stock down 44% in premarket trading Tuesday to $6.86 from a Monday closing price of $12.29.

However, ImmuneOnco didn’t appear as fazed, explaining in its own release that the Chinese company has “strong confidence in the therapeutic potentials, and remains committed to accelerating the clinical development of these assets.”

The termination of the deal won’t affect the upfront and milestone payments of $35 million ImmuneOnco has already received from Instil’s subsidiary, ImmuneOnco pointed out.

https://www.fiercebiotech.com/biotech/instils-stock-sinks-after-clearing-out-clinical-pipeline-handing-2-drugs-back-immuneonco