GNCA: Genocea Biosciences Analysis and Research Report
2018-04-25 - by Asif , Contributing Analyst - 344 views
Genocea Biosciences is a biopharmaceutical company that discovers and develops novel cancer vaccines. The company use its proprietary discovery platform, ATLAS, to recall a patient’s pre-existing CD4+ and CD8+ T cell immune responses to their tumor to identify antigens for inclusion in vaccines that are designed to act through T cell (or cellular) immune responses. The company believe that using ATLAS to identify antigens for inclusion in cancer vaccines could lead to more immunogenic and efficacious cancer vaccines.
In September 2017, the company announced a strategic shift to immuno-oncology and a focus on the development of neoantigen cancer vaccines. Currently, all of its research programs and product candidates in active development are at the preclinical stage. The company's most advanced program is its preclinical immuno-oncology program, GEN-009, a neoantigen cancer vaccine. The GEN-009 program uses ATLAS to identify patient neoantigens, or newly formed antigens unique to each patient, that are associated with that individual’s tumor. Genocea Biosciences is also exploring partnering opportunities in the development of cancer vaccines targeting tumor-associated antigens and a vaccine targeting cancers caused by Epstein-Barr Virus, or EBV.
Genocea Biosciences has one Phase 3-ready product candidate, GEN-003, an investigational immunotherapy for the treatment of genital herpes. In September 2017, the company announced that Genocea Biosciences is exploring strategic alternatives to maximize value for GEN-003 through sale, partnership or other means. Consequently, substantially all GEN-003 spending and activities were ceased and the company reduced its workforce by approximately 40 percent. The company continue to believe that GEN-003 could address unmet medical needs of genital herpes patients.
The importance of the T cell arm of the immune system is increasingly understood to be critical in the treatment of certain cancers. However, the discovery of effective T cell targets has been particularly challenging for two reasons. First, the diversity of human T cell responses means that an effective T cell target for one person may be different from an effective T cell target for another person. Second, the number of candidate targets for T cell responses can be very large with up to thousands of candidate antigens per patient in some cancers. These complexities represent fundamental barriers that traditional cancer vaccine target discovery tools, which rely largely on computer modeling - so-called predictive algorithms - have, as yet, only been poorly addressed.
Genocea Biosciences has designed the ATLAS platform to overcome these T cell target discovery challenges by identifying true neoantigens in an individual rather than using traditional predictive methods. The company believe ATLAS represents the most comprehensive and accurate high throughput system for T cell vaccine and immunotherapy discovery in the biopharmaceutical industry. ATLAS is designed to mimic the T cell arm of the human immune system in a laboratory setting. Using ATLAS, Genocea Biosciences is able to measure T cell responses to the entire set of potential T cell targets for an individual’s cancer, allowing it to identify vaccine and immunotherapy targets associated with T cell responses which may kill an individual’s cancer.
The company believe Genocea Biosciences is a leader in the field of T cell vaccine and immunotherapy discovery and development. The company's management and scientific teams possess considerable experience in vaccine, immunotherapy and anti-infective research, manufacturing, clinical development and regulatory matters.
The company's Immuno-Oncology Program
Genocea Biosciences is focused on combining its antigen selection and vaccine development expertise to create new immuno-oncology treatments. The company's potential cancer vaccines will be designed to educate T cells to recognize and attack specific targets and thereby kill cancer cells. Genocea Biosciences is working to develop personalized cancer vaccines by applying ATLAS to identify patient neoantigens that are associated with that individual’s pre-existing immune responses to a tumor.
Neoantigens are personalized tumor mutations that are seen as “foreign” by an individual’s immune system. Data published in recent years have indicated that an individual’s response to neoantigens drives checkpoint inhibitor efficacy and that it is possible to vaccinate an individual against their own neoantigens. If approved, neoantigen vaccines could be used in combination with existing treatment approaches for cancer, including immune checkpoint inhibitors, to potentially direct and enhance an individual’s T cell response to the individual’s cancer, thereby potentially affording better clinical outcomes.
The company's lead immuno-oncology program, GEN-009, is an adjuvanted neoantigen peptide vaccine candidate designed to direct a patient’s immune system to attack their tumor. GEN-009’s neoantigens are identified by its proprietary ATLAS platform, which recalls a patient’s pre-existing CD4+ and CD8+ cell immune responses to their tumor. Following ATLAS neoantigen identification, the company will manufacture a personal vaccine for each patient.
The company anticipate filing a personalized cancer vaccine IND application with the FDA in the first quarter of 2018 for GEN-009. The company plan to initiate a Phase 1/2a clinical trial for GEN-009 in a range of tumor types in subjects with no evidence of disease but a high risk of relapse in mid-2018. The company expect to report initial immunogenicity data from this trial in the first half of 2019.
Genocea Biosciences is also using ATLAS to develop cancer vaccines targeting tumor-associated, or shared, antigens and vaccines against cancers of viral origin. The company's strategy in immuno-oncology combines its own internal neoantigen vaccine development programs with a focus on partnering ATLAS for these other immuno-oncology applications.
In November 2015, the company commenced a program focused on EBV. EBV infection has been linked to cancers with high unmet needs such as non-Hodgkin’s lymphoma, nasopharyngeal carcinoma and gastric carcinoma. The company believe that ATLAS is highly suited to the creation of a new immunotherapy for EBV, given that T cell responses are understood to be crucial for protection against EBV. Furthermore, EBV is part of the herpes virus family, in which Genocea Biosciences has deep experience through its development of GEN-003. Genocea Biosciences is currently seeking a partner to advance the development of this vaccine.
Genocea Biosciences has had and continue to conduct a number of research collaborations which provide blood and tumor samples to support the development of ATLAS for application in neoantigen vaccines, shared antigen cancer vaccines and immune response profiling as follows:
- Neoantigen vaccine applications: Memorial Sloan Kettering Cancer Center (completed) and US Oncology Research (ongoing)
- Shared antigen cancer vaccines and immune response profiling: Dana-Farber Cancer Institute (completed) and Checkmate Pharmaceuticals (ongoing)
The Company is not dependent on these research collaborations to develop its product candidates and no material financial obligations exist as part of these collaborations.
The company's Immuno-oncology Product Candidate Pipeline
The following table describes its active programs in development:
|Vaccine Candidate||Program||Stage of Development||Next Milestone||Anticipated Timeline|
|GEN-009||Neoantigen cancer vaccine||Pre-clinical||File IND; commence Phase 1/2 clinical proof of concept trial||First quarter of 2018; mid-2018|
|GEN-010||Second generation neoantigen cancer vaccine||Pre-clinical||Select delivery technology platform||Ongoing|
|GEN-007||Epstein-Barr Virus||Research||Select antigen candidates||Ongoing, exploring partnering opportunities|
|GEN-006||Immuno-oncology -tumor-associated antigen vaccine||Research||Select antigen candidates||Ongoing, exploring partnering opportunities|
GEN-003 — Phase 2 immunotherapy for genital herpes, currently exploring strategic alternatives
Prior to its September 2017 strategic shift announcement, its lead program was GEN-003, a Phase 3-ready investigational immunotherapy for the treatment of genital herpes. The company completed three positive clinical trials for which key data from those clinical trials is described below. Genocea Biosciences is currently exploring strategic alternatives to maximize shareholder value from GEN-003, during which time Genocea Biosciences has ceased substantially all activities under the GEN-003 program.
Phase 1/2 Trial
Final analysis of the data from the Phase 1/2a trial showed that, for the best performing 30µg dose group, there was a sustained reduction in the viral shedding rate. After completion of dosing for this group, the viral shedding rate showed a statistically significant reduction of 52% versus baseline and, at six months after the final dose, the shedding rate remained at 40% below baseline. The reduction in the genital lesion rate after completion of the third dose was greatest for the 30 µg dose group at 48%. After six months, the reduction from baseline in genital lesion rate for this dose group was 65% and, after 12 months, the genital lesion rate was 42% lower than baseline. GEN-003 was well tolerated over the 12 months of this clinical trial.
Phase 2 Dose Optimization Trial
A 310-subject Phase 2 dose optimization trial was completed in March 2016. The objective of this trial was to confirm the results of the Phase 1/2a trial and to test six combinations of proteins and adjuvant to determine the optimal dose for future trials and potentially improve on the profile of GEN-003. Subjects were randomized to one of six dosing groups of either 30μg or 60μg per protein paired with one of three adjuvant doses (25 μg, 50 μg, or 75 μg). A seventh group received placebo. Subjects received three doses of GEN-003 or placebo at 21-day intervals. Baseline viral shedding and genital lesion rates were established for each subject in a 28-day observation period prior to the commencement of dosing by collecting 56 genital swab samples (two per day), which were analyzed for the presence of HSV-2 DNA, and by recording the days on which genital lesions were present. This 28-day observation period was repeated immediately after the completion of dosing, and at six and twelve months following dosing. No maintenance doses were given. After the 28-day observation period immediately after dosing, patients in the placebo arm were rolled over across the six active dose combinations under a separate protocol. Subsequent to March 2016, the company extended this clinical trial to include a separate protocol for an extension study which includes a 28-day observation period at 24 months post-dosing to evaluate the reduction versus baseline in both the viral shedding rate and the genital lesion rate.
The primary endpoint of the trial was the reduction in viral shedding rate versus baseline, a measure of anti-viral activity. A number of exploratory secondary endpoints were also studied, including, the reduction in genital lesion rates, the percent of patients who were recurrence free from lesions up to six and 12 months after dosing, and the time to first recurrence of lesions after dosing. The company advanced the two most promising doses from this dose optimization study, the 60 µg per protein combined with either 50 or 75 µg of Matrix-M2 adjuvant ("60/50 Dose" and "60/75 Dose" respectively), into a Phase 2b efficacy trial for which positive twelve-month, placebo-controlled clinical efficacy data was announced in July 2017 (see Phase 2b trial below).
Phase 2b Trial
In December 2015, a Phase 2b clinical trial was initiated as its first study testing potential Phase 3 endpoints with a Phase 3-ready formulation of GEN-003, manufactured with commercially-scalable processes. The trial enrolled 131 subjects that were randomized to one of three dose groups - placebo, 60/50 Dose, and 60/75 Dose. All subjects received three injections at 21-day intervals.
In September 2016, the company announced positive viral shedding rate reductions from the ongoing Phase 2b study. The study achieved its primary endpoint, with GEN-003 demonstrating a statistically significant (versus placebo and baseline) 40% reduction in the viral shedding rate compared to baseline immediately after dosing in the 60/50 Dose group, using a new Phase 3-ready formulation. This result was consistent with a statistically significant (versus placebo and baseline) viral shedding rate reduction of 41% at this same dose and time point in a prior Phase 2 clinical trial. In addition, the reactogenicity profile of this dose, an indication of the strength of the immune response to GEN-003, was consistent between the trials. This same dose in the prior Phase 2 clinical trial subsequently demonstrated virologic and clinical efficacy that was durable for at least one year after dosing.
The 60/75 Dose group reduced the viral shedding rate by 27%, which is lower than the rate observed in the prior trial, and also showed a less acceptable reactogenicity profile than the prior trial. The company believe that the increase in reactogenicity of this dose indicates an overstimulation of the T cell immune system leading to the reduced efficacy with this dose in this trial, as would be expected with the known bell-shaped T cell dose response curve. The likely driver of this effect is a more potent adjuvant formulation following customary manufacturing process changes to prepare for Phase 3 clinical trials and commercialization of GEN-003.
In July 2017, the company announced positive clinical results from the Phase 2b trial. At twelve months after dosing, GEN-003 demonstrated statistically significant improvements versus placebo in both the median genital lesion rate and across multiple clinical endpoints. The 60/50 Dose significantly reduced the median rate of genital lesions during the twelve months following dosing compared to placebo (49% reduction versus placebo). The median genital lesion rate is an important overall measure of disease that captures both the frequency and duration of recurrences, both of which are important to both patients and their caregivers. Importantly, these results were achieved at the Phase 3 dose and expected Phase 3 primary endpoint. GEN-003 also consistently demonstrated significant benefits versus placebo across several other clinical endpoints across the dose groups.
GEN-003 demonstrated no grade 4 reactogenicity or related serious adverse events ("AEs") and discontinuations due to AEs were low and similarly distributed across active dose groups and placebo. Around the end of the first quarter of 2017, the company had a successful end-of-Phase 2 meeting with the U.S Food and Drug Administration ("FDA"). The company believe that progress made and data generated to date in the GEN-003 preclinical and clinical trials remains valuable to the Company for the future.
The biotechnology and pharmaceutical industries are characterized by intense and rapidly changing competition to develop new technologies and proprietary products. Although the company believe that its proprietary patent portfolio and T cell vaccine expertise provide it with competitive advantages, the company face potential competition from many different sources, including larger and better-funded pharmaceutical companies. Not only must the company compete with other vaccine companies but any products that the company may commercialize will have to compete with existing therapies and new therapies that may become available in the future.
There are other organizations working to improve existing therapies or to develop new vaccines or therapies for its initially selected indications. Depending on how successful these efforts are, it is possible they may increase the barriers to adoption and success of its product candidates, including GEN-009, if approved.
There are several companies attempting to develop new neoantigen cancer vaccines, including Neon Therapeutics, Gritstone Oncology, Immatics Biotechnologies GmbH, Aduro, Advaxis, Agenus, Moderna, CureVac and BioNTech. The company believe that GEN-009 has advantages against each of these product candidates based on the potential power of the ATLAS platform to comprehensively identify for each cancer patient the neoantigens to which such patient has a pre-existing immune response. The company believe that selecting neoantigens for personal cancer vaccines using ATLAS will lead to more effective vaccines. However, there can be no assurance that one or more of these companies or other companies will not achieve similar or superior clinical results in the future as compared to GEN-009 or that its future clinical trials will be successful.
Many of its competitors, either alone or with their strategic partners, have substantially greater financial, technical and human resources than the company do and significantly greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of vaccines and the commercialization of those vaccines. Accordingly, its competitors may be more successful than it in obtaining approval for vaccines and achieving widespread market acceptance. The company's competitors’ vaccines may be more effective, or more effectively marketed and sold, than any vaccine the company may commercialize and may render its vaccines obsolete or non-competitive.
Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of its competitors. These competitors also compete with it in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, its programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
The company anticipate that the company will face intense and increasing competition as new drugs enter the market and advanced technologies become available. The company expect any vaccines that the company develop and commercialize to compete on the basis of, among other things, efficacy, safety, convenience of administration and delivery, price, the level of generic competition and the availability of reimbursement from government and other third-party payors.
The company's commercial opportunity could be reduced or eliminated if its competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that the company may develop. The company's competitors also may obtain FDA or other regulatory approval for their products more rapidly than the company may obtain approval for its products, which could result in its competitors establishing a strong market position before Genocea Biosciences is able to enter the market. In addition, its ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic products.
The company strive to protect and enhance the proprietary technology, inventions and improvements that are commercially important to its business, including seeking, maintaining, and defending patent rights, whether developed internally or licensed from third parties. The company also rely on trade secrets relating to its proprietary technology platform and on know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen and maintain its proprietary position in the vaccine field. The company additionally rely on regulatory protection afforded through data exclusivity, market exclusivity and patent term extensions where available. Still further, the company utilize trademark protection for its company name, and expect to do so for products and/or services as they are marketed.
The company's commercial success may depend in part on its ability to obtain and maintain patent and other proprietary protection for commercially important technology, inventions and know-how related to its business; defend and enforce its patents; preserve the confidentiality of its trade secrets; and operate without infringing the valid enforceable patents and proprietary rights of third parties. The company's ability to stop third parties from making, using, selling, offering to sell or importing its products may depend on the extent to which Genocea Biosciences has rights under valid and enforceable patents or trade secrets that cover these activities. With respect to both licensed and company-owned intellectual property, the company cannot be sure that patents will be granted with respect to any of its pending patent applications or with respect to any patent applications filed by it in the future, nor can the company be sure that any of its existing patents or any patents that may be granted to it in the future will be commercially useful in protecting its commercial products and methods of manufacturing the same.
Genocea Biosciences has developed or in-licensed numerous patents and patent applications and possess substantial know-how and trade secrets relating to the development and commercialization of vaccine products. The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which the company file, the patent term is 20 years from the date of filing the non-provisional application. In the United States, a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the United States Patent and Trademark Office ("U.S. PTO") in granting a patent, or may be shortened if a patent is terminally disclaimed over an earlier-filed patent.
The term of a patent that covers an FDA-approved drug may also be eligible for patent term extension, which permits patent term restoration of a United States patent as compensation for the patent term lost during the FDA regulatory review process. The Hatch-Waxman Act permits a patent term extension of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug is under regulatory review. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug may be extended. Moreover, a patent can only be extended once, and thus, if a single patent is applicable to multiple products, it can only be extended based on one product. Similar provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that covers an approved drug. When possible, depending upon the length of clinical trials and other factors involved in the filing of a biologics license application ("BLA") the company expect to apply for patent term extensions for patents covering its product candidates and their methods of use.
The company's discovery platform patent portfolio includes four patent families, currently comprising seven issued U.S. patents. The company hold an exclusive license from The Regents of the University of California ("UC") to the first patent family, including U.S. Patent 6,004,815 and the related U.S. Patents 6,287,556 and 6,599,502. This first family includes claims to fundamental aspects of the ATLAS platform, developed by its scientific founder, Darren Higgins, Ph.D. while he was employed at the University of California, Berkeley. Patents in this family have a patent term until August 2018. The company hold a further exclusive license from President and Fellows of Harvard College ("Harvard") to the second patent family, which covers methods related to the ATLAS discovery platform, including discovery of antigens expressed in neoplastic cells. This second patent family includes U.S. Patent 9,051,564, a pending and allowed U.S. application, issued patents in Europe and Australia and pending applications in Europe and Canada. Patents issuing from these applications are expected to expire in 2027 with the exception of U.S. Patent 9,051,564 which includes a Patent Term Adjustment and extends until December 2031. The company wholly own the third patent family, which is specifically directed to the ATLAS platform as utilized by it, including for discovery of cancer-or tumor-related antigens. This third patent family includes U.S. Patents 8,313,894, 9,045,791, and 9,873,370, a pending and U.S. patent application, an issued patent in Australia, an allowed application in Canada, and pending applications in Europe, Canada and Australia. Patents issuing from applications in this family are expected to have a patent term until at least July 2029. U.S. Patents 8,313,894 and 9,045,791 have terms that include Patent Term Adjustments and extend until August 2030 and August 2029, respectively. U.S. Patent 9,873,870 has a term that extends until July 2029. The company wholly own the fourth patent family, which is directed to methods for cancer diagnosis, prognosis, and patient selection, as well as related compositions. This fourth family currently comprises three provisional applications.
GEN-003 (Genital Herpes)
The company wholly own a portfolio of patent applications directed to HSV-2 vaccines, including GEN-003. This portfolio includes three patent families covering HSV-2 vaccine compositions and methods for inhibiting or treating HSV-2 infections, combination treatment with antiviral medications, and maintenance dosing. The first patent family includes U.S. Patent 8,617,564, a pending and allowed U.S. application, and patents granted in Australia, China, Indonesia, Israel, Japan, Korea, Mexico, Malaysia, New Zealand, Russia, Singapore, and South Africa. Applications in Europe, Canada, Brazil, India, China and Hong Kong are pending in the first patent family. Patents that issue from applications in the first family are expected to expire in 2030. The term for U.S. Patent 8,617,564 includes Patent Term Adjustment and extends until at least November 2030. The second family includes a pending PCT application and a pending U.S. application. The third family comprises one provisional application. Patents that issue from applications in these families are expected to expire in 2037 and 2038, respectively.
The company own two further patent families covering follow-on HSV-2 vaccine compositions. The first family includes U.S. Patent 9,782,474 and patents issued in Australia and Japan. The second family includes U.S. Patent 9,624,273, patents granted in Australia and Japan, and pending applications in Europe and Canada. Patents that issue from applications in these families are expected to expire in 2031 and 2032, respectively.
The company hold a license from Isconova AB (now Novavax, Inc.) to two patent families covering Matrix-M2, the adjuvant used in GEN-003. The first patent family includes a pending U.S. application and issued patents in Europe, Canada, Australia, Japan, Brazil, New Zealand and South Africa. The second patent family includes U.S. Patent 8,821,881 and issued patents in Europe, Canada, Australia, Japan, Brazil, New Zealand and South Africa. These issued patents have patent terms until at least July 2023 and July 2024. The issued U.S. patent in the second patent family, U.S. Patent 8,821,881, has a term that extends until August 2026 inclusive of a Patent Term Adjustment.
In addition to the above, Genocea Biosciences has established expertise and development capabilities focused in the areas of preclinical research and development, manufacturing and manufacturing process scale-up, quality control, quality assurance, regulatory affairs and clinical trial design and implementation. The company believe that its focus and expertise will help it develop products based on its proprietary intellectual property.
University of California
In August 2006, the company entered into an exclusive license agreement with UC granting it an exclusive, royalty-bearing sublicensable license to a patent family that includes claims to fundamental aspects of the ATLAS platform, to make, use, offer for sale, import and sell licensed products and services, and to practice licensed methods in all fields of use in the United States. This patent family consists entirely of issued United States patents with a patent term until August 2018. UC retains the right to practice and to allow other educational and non-profit institutions to practice, the licensed intellectual property licensed under the agreement for educational and research purposes.
Until first commercial sale of a licensed product or service, Genocea Biosciences is obligated to pay UC an annual license maintenance fee in the low five figures. Upon commercialization of its products and services covered by the licensed patents, Genocea Biosciences is obligated to pay UC royalties in the low single digits, subject to a minimum annual royalty in the low five figures, on the net sales of such products and services sold by it or its affiliates for the life of any licensed patents covering the products or services. The royalties payable to UC are subject to reduction for any third party payments required to be made, with a minimum floor in the low single digits. In addition, the company agreed to pay UC a flat royalty in the low single digits on net sales of products sold by it or its affiliates which include a polypeptide, nucleotide sequence, biological organism or chemical entity identified in the practice of a licensed method or service, but not otherwise covered, by the licensed patent for the life of the licensed patents. If the company receive any revenue (cash or non-cash) from any sublicensees, the company must pay UC a percentage of such revenue, excluding certain categories of payments but including royalties on net sales by sublicensees, varying in the low-double digits for any sublicense depending on the scope of the license. Under the terms of the agreement, Genocea Biosciences is obligated to pay UC a specified development milestone payment and a specified commercial milestone payment up to $500 thousand in the aggregate for the first licensed product covered by the licensed patents, plus up to an additional $250 thousand if specified development and commercial milestones are met for each subsequent licensed product covered by the licensed patents. As of December 31, 2017, Genocea Biosciences has not made any milestone payments.
Genocea Biosciences is required to diligently develop and market licensed products, services and methods. If Genocea Biosciences is unable to meet its diligence obligations, even after any extension thereof, UC has the right, depending on the number of years the agreement has been effective, to either terminate the agreement or convert its exclusive license to a non-exclusive license.
Unless earlier terminated, the agreement with UC will remain in effect until the expiration of the last-to-expire patent under the licensed patent rights in August 2018. The company may terminate the agreement at any time by giving UC advance written notice. The agreement may also be terminated by UC in the event of a material breach by it that remains uncured after a specified period of time.
In November 2007, the company entered into an exclusive license agreement with Harvard, granting it an exclusive, worldwide, royalty-bearing, sublicensable license to three patent families, to develop, make, have made, use, market, offer for sale, sell, have sold and import licensed products and to perform licensed services. This agreement was amended and restated in November 2012. The Harvard intellectual property covers methods related to the ATLAS discovery platform, including discovery of antigens expressed in neoplastic cells, as well as certain chlamydia immunogenic compositions and methods for inhibiting or treating chlamydia infections. Any patents within this portfolio that have issued or may be issued will expire normally in 2027 and 2028. Harvard retains the right to make and use, and to grant licenses to other not-for-profit research organizations to make and use, the licensed intellectual property for internal research, teaching and other educational purposes. The company notified Harvard of its partial termination of the license agreement with regard to intellectual property covering chlamydia antigens on December 8, 2014. Effective March 8, 2015, the license agreement with Harvard with regard to intellectual property covering chlamydia antigens was terminated and the company no longer hold a license to two of the three in-licensed Harvard patent families, or to a chlamydia antigen covered by the remaining family. The remaining family covers certain aspects of the ATLAS platform, as well as one chlamydia antigen, and the company continue to maintain exclusive rights to aspects of the ATLAS platform covered by this family.
Genocea Biosciences is obligated to pay Harvard an annual license maintenance fee ranging from the low five figures to the mid-five figures depending on the type of product and the number of years after the effective date of the agreement. For products covered by the licensed patent rights, Genocea Biosciences is obligated to pay Harvard milestone payments up to $1.8 million in the aggregate upon the achievement of certain development and regulatory milestones. For products discovered using the licensed methods, Genocea Biosciences is obligated to pay Harvard milestone payments up to $600 thousand in the aggregate for each of the first three products and up to $300 thousand in the aggregate for each additional product under the agreement upon the achievement of certain development and regulatory milestones. As of December 31, 2017, the company paid $198 thousand in aggregate milestone payments. Upon commercialization of its products covered by the licensed patent rights or discovered using the licensed methods, Genocea Biosciences is obligated to pay Harvard royalties on the net sales of such products and services sold by it, its affiliates and its sublicensees. This royalty varies depending on the type of product or service but is in the low single digits. The royalty based on sales by its sublicensees is the greater of the applicable royalty rate or a percentage in the high single digits or the low double digits of the royalties the company receive from such sublicensee depending on the type of product. Depending on the type of commercialized product or service, royalties are payable until the expiration of the last-to-expire valid claim under the licensed patent rights or for a period of 10 years from first commercial sale of such product or service. The royalties payable to Harvard are subject to reduction, capped at a specified percentage, for any third party payments required to be made. In addition to the royalty payments, if the company receive any additional revenue (cash or non-cash) under any sublicense, the company must pay Harvard a percentage of such revenue, excluding certain categories of payments, varying from the low single digits to up to the low double digits depending on the scope of the license that includes the sublicense.
Genocea Biosciences is required to use commercially reasonable efforts to develop licensed products, introduce them into the commercial market and market them, in compliance with an agreed upon development plan. Genocea Biosciences is also obligated to achieve specified development milestones. If Genocea Biosciences is unable to meet its development milestones for any type of product or service, absent any reasonable proposed extension or amendment thereof, Harvard has the right, depending on the type of product or service, to terminate this agreement with respect to such products or to convert the license to a non-exclusive, non-sublicensable license with respect to such products and services.
The company's agreement with Harvard will expire on a product-by-product or service-by-service and country-by-country basis until the expiration of the last-to-expire valid claim under the licensed patent rights. The company may terminate the agreement at any time by giving Harvard advance written notice. Harvard may also terminate the agreement in the event of a material breach by it that remains uncured; in the event of its insolvency, bankruptcy, or similar circumstances; or if the company challenge the validity of any patents licensed to it.
In August 2009, the company entered into an exclusive license and collaboration agreement with Isconova AB, a Swedish company which has subsequently been acquired by Novavax. The agreement grants it a worldwide, sublicensable, exclusive license to two patent families, to import, make, have made, use, sell, offer for sale and otherwise exploit licensed vaccine products containing an adjuvant which incorporates or is developed from Matrix-A, Matrix-C and/or Matrix-M technology, in the fields of HSV and chlamydia, and the time-limited exclusive fields of Neisseria gonorrhoeae, cytomegalovirus and Mycobacterium tuberculosis. In July 2015, upon expiration of the five-year exclusivity term included in the agreement, the license granted to it converted to a non-exclusive license with respect to all licensed intellectual property rights that were not jointly invented by it and Novavax under the collaboration. Under the terms of this agreement, Novavax also grants it a worldwide, sublicensable, non-exclusive license under such licensed intellectual property rights to import, make, have made, use, sell, offer for sale and otherwise exploit licensed products in the field of Streptococcus pneumoniae. The company's rights in the field of Streptococcus pneumoniae are exclusive with respect to all intellectual property rights jointly invented by it and Novavax under the collaboration. The agreement further grants it certain limited rights to use Novavax trademarks.
For licensed products in each unique disease field under the agreement, Genocea Biosciences is obligated to pay Novavax milestone payments up to approximately $3.0 million in the aggregate upon the achievement of certain development and commercial milestones. As of December 31, 2017, the company paid $275 thousand in aggregate milestone payments. Upon commercialization of its products, Genocea Biosciences is obligated to pay Novavax royalties on the net sales of licensed products sold by it, its affiliates and its sublicensees. The royalties payable to Novavax are in the low single digits and vary on a country-by-country and licensed product-by-licensed product basis based on the amount of net sales and the nature and timing of the licensed product’s development. The royalties payable to Novavax are subject to reduction if the licensed product is not covered by one or more valid claims of the licensed patent rights, or if Genocea Biosciences is required to make any third-party payments. Royalties are payable for 10 years from first commercial sale in any particular country or until the date on which offer for sale of a licensed product is no longer covered by a valid claim of the licensed patent rights in such country, whichever period is longer. In addition to the royalty payments, if the company receive any additional revenue (cash or non-cash) under any sublicenses, the company must pay Novavax a percentage of such revenue, up to the low double digits.
Genocea Biosciences is required to use commercially reasonable efforts to perform specified research activities in accordance with an agreed-upon research plan. Genocea Biosciences is also obligated to use commercially reasonable efforts consistent with prudent business judgment and business and market conditions to research, develop and carry out the commercialization of licensed products in HSV and chlamydia.
The company's agreement with Novavax will expire on a country-by-country and licensed product-by-licensed product basis on the date of the expiration of the royalty term with respect to such licensed product in such country. The company may terminate the agreement on a country-by-country and licensed product-by-licensed product basis or in its entirety at any time by giving Novavax advance written notice. Both parties may also terminate the agreement in the event of a material breach by the other party that remains uncured or for bankruptcy, insolvency or similar circumstances. Novavax may terminate this agreement if the company challenge the validity of any patents licensed to it.
The agreement also contained a research funding clause for which the company made monthly payments to Novavax between August 2009 and March 2012 of approximately $1.6 million. All amounts of research funding provided were to be refunded by Novavax. After December 31, 2015, any amounts remaining due from Novavax, including accrued interest, could be received in cash upon 30-day written notice provided by it. The company provided this notice in January 2016 and received the $1.6 million refund in February 2016.
In February 2014, the company entered into a supply agreement with FUJIFILM Diosynth Biotechnologies U.S.A., Inc. ("Fujifilm") for the manufacture and supply of antigens for future GEN-003 clinical trials. In June and September 2016, the Company entered into new statements of work under the agreement with Fujifilm for the manufacture and supply of antigens for the Company's Phase 3 clinical trials. Under these agreements, Genocea Biosciences is obligated to pay Fujifilm milestone payments up to the low-eight figures upon the achievement of certain manufacturing milestones. Additionally, raw materials, resins and consumables purchased for the vaccine production are invoiced separately as such costs are incurred by Fujifilm. The company pay Fujifilm’s actual costs plus a percentage fee in the mid-single digits for these raw materials, resins and consumables. The company also are required to pay reservation fees, which equal a percentage of production fees in the low-double digits, to reserve manufacturing slots in the production timeframe as agreed upon under the agreement. Genocea Biosciences is required to use commercially reasonable efforts to timely provide Fujifilm with the technology, materials and resources needed to produce and supply the recombinant protein antigen. As of December 31, 2017, Genocea Biosciences has incurred expenses under the agreement of approximately $16.0 million.
In September 2017, the Company notified Fujifilm to cease all manufacturing activities of antigens for GEN-003. Amounts recorded as of December 31, 2017 represent all liabilities for manufacturing services complete or in process prior to the notification date, materials purchased which cannot be re-used or re-purposed by Fujifilm and charges for terminating services within a certain time frame of the anticipated start dates.
The company's agreement with Fujifilm will expire on February 25, 2024. Subject to termination fees under applicable circumstances, the company may terminate the agreement at any time by giving Fujifilm advance written notice. The agreement may also be terminated by either party due to a material uncured breach by the other party.
In January 2018, the company entered into a License and Supply Agreement with Oncovir, Inc. (“Oncovir”). The agreement provides the terms and conditions under which Oncovir will manufacture and supply an immunomodulator and vaccine adjuvant, Hiltonol® (poly-ICLC) (“Hiltonol”), to it for use in connection with the research, development, use, sale, manufacture, commercialization and marketing of products combining Hiltonol with the its technology (the “Combination Product”). Hiltonol is the adjuvant component of GEN-009, which will consist of synthetic long peptides or neoantigens identified using its proprietary ATLAS platform, formulated with Hiltonol. When paired with synthetic long peptides, Hiltonol has shown the ability to induce T cell responses, which the company believe will be important for driving the clinical efficacy of GEN-009. Hiltonol is manufactured under good manufacturing practice ("GMP") conditions, has an existing drug master file and has an extensive tolerability record when used alone and in combination with vaccine antigens. Genocea Biosciences is not required to purchase any minimum quantity of Hiltonol from Oncovir.
Oncovir granted it a non-exclusive, assignable, royalty-bearing worldwide license, with the right to grant sublicenses through one tier, to certain of Oncovir’s intellectual property in connection with the research, development or commercialization of Combination Products, including the use of Hiltonol, but not the use of Hiltonol for manufacturing or the use or sale of Hiltonol alone. The license shall become perpetual, fully paid-up and royalty-free on the later of January 25, 2028 or the date on which the last valid claim of any patent licensed to it under the agreement expires.
Under this agreement, Genocea Biosciences is obligated to pay Oncovir (i) an up-front payment in the mid-six figures in consideration of the license granted to it and for the initial supply of Hiltonol for the planned GEN-009 Phase 1/2 trial, (ii) a supply price for Hiltonol in the low-three figures per vial of Hiltonol for use in clinical trials or commercial use, (iii) a milestone payment in the low-six figures upon the achievement of certain clinical trial milestones for each Combination Product, (iv) a milestone payment in the mid-six figures upon the first marketing approval for each Combination Product in certain territories, and (v) tiered royalties in the low-single digits on a product-by-product basis based on the net sales of Combination Products.
The company may terminate the agreement upon a decision to discontinue the development of the Combination Product or upon a determination by it or an applicable regulatory authority that Hiltonol or a Combination Product is not clinically safe or effective. The agreement may also be terminated by either party due to a material uncured breach by the other party, or due to the other party’s bankruptcy, insolvency or dissolution.
The company may rely, in some circumstances, on trade secrets to protect its technology. However, trade secrets can be difficult to protect. The company seek to protect its proprietary technology and processes, in part, by entering into confidentiality agreements with its employees, consultants, scientific advisors and contractors. The company also seek to preserve the integrity and confidentiality of its data and trade secrets by maintaining physical security of its premises and physical and electronic security of its information technology systems. While Genocea Biosciences has confidence in these individuals, organizations and systems, agreements or security measures may be breached, and the company may not have adequate remedies for any breach. In addition, its trade secrets may otherwise become known or be independently discovered by competitors. To the extent that its consultants, contractors or collaborators use intellectual property owned by others in their work for it, disputes may arise as to the rights in related or resulting know-how and inventions.