Oncology powerhouse Roche and Inovio Pharmaceuticals, a small public biotech company that has patiently been building a best-in-class vaccine technology, have entered into a partnership worth up to $422.5 million.

Inovio has granted Roche an exclusive worldwide license to two of its preclinical therapeutic vaccine candidates: INO-5150, in development to treat prostate cancer, and INO-1800, in development against hepatitis B infection. Roche will take over all further development and commercialization costs, paying Inovio $10 million upfront and up to another $412.5 million in milestones, plus double-digit royalties if the products are commercialized.

“A validating partnership with an esteemed company such as Roche, especially in oncology, puts the stamp of approval of what we’ve been working on in the last several years,” says J. Joseph Kim, president and CEO of Inovio.

Inovio makes synthetic DNA vaccines that contain the DNA codes of target antigens. These vaccines are introduced into cells using its proprietary electroporation delivery technology, which opens up holes in cell membranes so the DNA plasmid can get inside and begin to make antigens to elicit T-cell immune response. The company has been consistently able to show best-in-class T-cell immune responses in preclinical animal and human studies and has actively published the results.

These high response rates are what attracted Roche to Inovio. Roche had been looking to expand its cancer immunotherapy pipeline, says Stefan Frings, head of Oncology/Immunology partnering at Roche, in order to be able “to place bets so that we can modulate the immune system at numerous inflection points.”

From Roche’s viewpoint, Inovio delivers one of the best immunogenic approaches. “They have a DNA-vaccine tailor-made to increase and enhance immunogenicity as far as possible and then the proprietary electroporation technology is applied to deliver a further boost in the immunogenic potential,” says Frings.

Roche and Inovio will collaborate on the development of INO-5150 through a joint development committee and Roche will fund research on other targets that INO-5150 might address.

Although therapeutic cancer vaccines have recently seen some late-stage failures, the latest occurring a week earlier when GlaxoSmithKline reported disappointing results for its cancer vaccine candidate in a late-stage trial as a treatment for melanoma, Roche sees Inovio’s preclinical candidate as an important addition to its arsenal, especially because of its potential to be used in combination with checkpoint inhibitors, and other mechanisms of action for modulating the immune system.

Because immune modulation is a rapidly evolving field, Roche was not interested in licensing a more advanced program. Frings says Roche likes the fact that INO-5150 is just about ready for clinical trials rather than more advanced. In that way it can tailor the program as it sees best, perhaps through further antigen optimization, a different adjuvant, or different combinations with its own immune portfolio.

“We wouldn’t bank on any phase 3 program currently to be successful. We wouldn’t exclude it but we certainly want to enhance a chance of success for the Inovio partnership based on further enhancement [of the vaccine] and combination therapies to really make a difference,” says Frings.

Inovio’s Kim couldn’t be more enthusiastic about the deal. Inovio expects to file an investigational new drug application for INO-5150 by the end of the year. The capital infusion from the Roche deal will help it advance other pipeline candidates, particularly its lead therapeutic vaccine against HPV-related cancers and dysplasia, which is in mid-stage development with first results expected in mid 2014.

While the agreement with Roche is a first for Inovio, it won’t be its last, says Kim. He says there were multiple suitors for the compounds it licensed to Roche and it is having ongoing discussions with other pharmaceutical companies for other programs for infection and other cancer targets.

“It brings out the true value of our approach and platform,” says Kim.