UPDATE 1-NewLink in $1 bln deal with Roche to develop cancer drug

Mon Oct 20, 2014 8:05am EDT
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(Adds detail; updates shares)

Oct 20 (Reuters) - NewLink Genetics Corp said it entered into an agreement with Roche Holding AG to develop NewLink's cancer immunotherapy, making the Ebola vaccine developer eligible to receive over $1 billion in milestone payments.

NewLink's shares jumped nearly 30 percent before the bell on Monday.

Immunotherapies are a class of drugs designed to help the body's own immune system fend off disease.

Iowa-based NewLink, which holds the commercial license for an Ebola vaccine developed by the Canadian government, will receive an upfront payment of $150 million under the worldwide licensing deal from Genentech, a unit of Switzerland's Roche.

Under the agreement, the companies will develop a NewLink inhibitor, NLG919, that is designed to disrupt the mechanism by which tumors evade the patients immune system.

Genentech will fund future research, development, manufacturing and marketing costs related to the drug, NewLink said.

NLG919 is currently in early-stage testing for use in solid tumors. The company is currently testing a similar inhibitor, indoximod, in mid-stage studies in patients with breast and prostate cancer.

NewLink's shares were up 30 percent at $38.20. They rose 62 percent in the past week. (Reporting by Natalie Grover in Bangalore; Editing by Saumyadeb Chakrabarty)