$Calithera Biosciences, Inc.(CALA)$ • Thinly traded nano cap Calithera Biosciences (NASDAQ:CALA) is up 35% premarket, albeit on only 750 shares, in response to its announcement of a global collaboration and license agreement with Incyte (NASDAQ:INCY) research, develop and commercialize CB-1158 in hematology and oncology.
• Under the terms of the agreement, Calithera will receive $45M upfront, up to $430M in milestones and tiered royalties from low- to mid-double digits. Incyte will also make an $8M investment in Calithera via the purchase of common stock at $4.65 per share (Friday's close was $4.60). Development costs will be funded on a 70/30 basis with Incyte paying the majority share. U.S. profit and losses will be shared on a 60/40 basis (greater share to Incyte). Calithera will have co-promotion (detailing) rights in the U.S.
• CB-1158 inhibits an enzyme called arginase that is found in myeloid-derived suppressor cells which plays a key role in suppressing the immune system's anti-tumor activity. Specifically, it depletes the amino acid arginine in the tumor microenvironment and prevents the activation of the immune system's cytotoxic T cells and NK (natural killer) cells.
• Incyte will have global rights to CB-1158 for hematology and oncology while Calithera will retain the rights to certain other arginase inhibitors in certain orphan indications. It also has the right to opt out of its co-funding obligations and instead receive up to $750M in milestones instead of a share of the future U.S. profits and losses (in addition to tiered low-to-mid-double-digit royalties).