Xilio gets a Gilead-shaped reprieve

At the end of last year Xilio Therapeutics’ future looked uncertain, but today's deal with Gilead over a tumour-activated IL-12 project has given the micro-cap a new lease of life. Gilead is paying $43.5m up front in cash and stock for rights to XTX301; the deal, along with an $11.3m private placement and restructuring also announced today, will extend Xilio’s cash runway into 2025.

Now the companies will have to show that XTX301 can succeed where many other IL-12 contenders have failed. The project is designed to be activated in the tumour microenvironment, a feature that Xilio hopes will solve the problem other players have had in finding a therapeutic window for IL-12.

In January Xilio reported preliminary safety data from a phase 1 solid tumour trial of XTX301, showing no dose-limiting toxicities among nine patients receiving 5-45ug/kg once every three weeks. The company added that the highest dose was nearly 100 times the maximum tolerated dose of recombinant human IL-12.

Next up for XTX301 will be phase 1 safety, pharmacokinetic and pharmacodynamic data, due in the second half of the year.

Xilio is responsible for dose expansion in the current trial; after this Gilead can take the project on for a $75m transition fee. Overall, Gilead could be on the hook for another $604m, as well as tiered royalties.

This is a major turnaround for Xilio, which last November said it had enough cash to last only until mid-2024. It's notable that the value of Gilead's up-front fee is nearly three times higher that Xilio's $17m market cap at close yesterday.

IL-12 failures

Judging by the track record of IL-12 therapies, success for XTX301 is by no means assured. The field has seen various setback, including last year’s failure of Oncosec’s intratumoural IL-12 gene therapy tavokinogene telsaplasmid. 

AstraZeneca has also abandoned various efforts here, including the Moderna-originated mRNA project MEDI1191, the gene therapy MEDI9253, and the so-called “cancer vaccine” INO-3112, which continues in the hands of its inventor, Inovio.

Bristol Myers Squibb also exited a partnership with Dragonfly Therapeutics last year, although the latter is still pressing on with DF6002. 

As for Xilio, its focus is now on XTX301 and XTX101, a tumour-activated anti-CTLA4 project. The group had also been developing XTX202, a tumour-activated, beta-gamma biased IL-2, another cytokine that has had its ups and downs. However, today Xilio said that, after seeing no responses in a phase 2 trial, it was discontinuing monotherapy efforts and would look for a partner for combination development.

This, along with Cytomx’s recent tribulations, serves as a reminder that masking technology doesn’t always lead to a better therapy. Gilead hasn't broken the bank for its Xilio experiment, but given the dire straits the latter company had been in perhaps the big biotech could have driven a harder bargain.

The mid to late-stage IL-12 pipeline

*AstraZeneca handed back rights Oct 2021; **Bristol handed back rights Feb 2023. Source: OncologyPipeline.