Elevation Oncology is setting out for a climb to the clinic, with $27 million paid out in a new licensing deal for an antibody drug conjugate (ADC) from CSPC Megalith Biopharmaceutical.
The biotech will gain exclusive worldwide rights outside of China to EO-3021 with the intention of launching a phase 1 U.S. clinical trial in 2023 for the oncology asset. The new deal broadens Elevation’s pipeline to two clinical-stage precision oncology candidates for solid tumors. CSPC is a subsidiary of CSPC Pharmaceutical Group in China.
The FDA has already okayed an investigational new drug application for EO-3021, clearing the candidate to be tested in humans in the U.S.
EO-3021 is a differentiated ADC targeting Claudin18.2, a protein expressed across several types of solid tumors, and is currently being investigated by CSPC in a phase 1, dose-escalation clinical trial in China.
Under the agreement, CSPC also has the potential to receive up to $148 million in milestone payments and up to $1 billion in commercial milestone payments plus royalties on net sales.
Elevation’s one-time $27 million upfront payment to CSPC will be paid primarily using a new $50 loan from K2 HealthVentures, an alternative investment firm for life sciences and healthcare companies. Split into two tranches, K2 has made an initial $30 million immediately available to Elevation.
Elevation anticipates using its remaining $20 million loan from K2 to fund the continued development of EO-3021 and seribantumab, its treatment for solid tumors harboring an NRG1 fusion currently being studied in a phase 2 study, as well as other pipeline expansion activities.
After the licensing of EO-3021 and initial tranche of the loan facility, Elevation expects its cash runway to extend into 2024.
New York-based Elevation's stock took a 12% dip after the news broke, dropping to $1.23 this morning compared to a prior close of $1.41.