Horizon Discovery (LON:HZD) is to form a new joint venture called Avvinity Therapeutics in a bid to target an immuno-oncology market currently worth £25bn a year.
The venture is with UK based biotech Centauri Therapeutics and will combine Horizon's gene editing, immunology, oncology and drug discovery capabilities with Centauri's Alphamer technology to develop therapeutics for solid tumours and leukaemias.
Dr Darrin M. Disley' chief executive of Horizon, told investors: "By combining Horizon's deep understanding of the genetic basis of cancer alongside its gene editing, drug discovery and emerging immuno-oncology toolbox, with Centauri's unique Alphamer technology and knowledge of its use, we have created an exciting new company to spearhead Horizon's move into targeted therapeutic development."
Under the terms, Horizon will out-license certain intellectual property (IP) relating to its translational genomics and drug discovery platforms, and will invest up to £5.3 million over two tranches.
The first tranche of £2.5mln has been committed, and the second will be at Horizon's discretion pending the progress of three development programmes.
Centauri will license background IP and expertise on its Alphamer technology to Avvinity, which will have exclusivity for the field of oncology for an initial three years, which can be extended.
Neither Horizon nor Centauri have to provide further funding to Avvinity, though both may choose to participate in future funding rounds. Subject to achieving key development milestones, Avvinity plans to raise new external investment to take its innovative drugs into clinical trials, at which time the value of Horizon's stake in the business would be highly-material, the firm pointed out.
The move is part of Horizon's strategy to invest up to £10 million, further leveraged by its IP, technology platforms and know-how, to identify the next generation of molecular and cellular cancer therapeutics.