Aquinox Pharmaceuticals, based in Vancouver, BC, and Neoleukin Therapeutics, a privately held biopharmaceutical company and University of Washington Spinout based in Seattle, WA, have agreed to enter into a definitive merger agreement under which Aquinox agreed to the acquisition of Neoleukin, which is expected to close on or about August 8th, 2019.
Aquinox discovers and develops novel drug candidates for the treatment of inflammation, inflammatory pain, and blood cancers. The company focuses on activating SHIP1, a 145 kDa large protein and member of the inositol polyphosphate-5-phosphatase (INPP5) family believed to decrease the inflammatory process, thereby reducing inflammation and inflammatory pain.
In preclinical and clinical studies scientists at Aquinox have shown that inflammation can be reduced by administration of compounds that activate SHIP1. They have demonstrated that if the PI3K pathway is overactive, immune cells may produce an abundance of pro-inflammatory signaling molecules, migrating to and concentrating in tissues, resulting in excessive or chronic inflammation. 
Signaling via the PI3K pathway, an intracellular signaling pathway important in regulating the cell cycle, has been intensively been researched, a reflection of this pathway’s importance in various cellular functions as well as in pathologic conditions such as malignancy.
The PI3K pathway is directly related to cellular quiescence, proliferation, cancer, and longevity. Activation of PI3K phosphorylates and activates Protein kinase B (PKB), also known as AKT, a serine/threonine-specific protein kinase that plays a key role in multiple cellular processes such as glucose metabolism, apoptosis, cell proliferation, transcription and cell migration, localizing it in the plasma membrane. AKT can have a number of downstream effects such as activating CREB (cAMP response element-binding protein), a cellular transcription factor , inhibiting p27, localizing FOXO in the cytoplasm, activating PtdIns-3ps, and activating mTOR  which can affect transcription of p70 or 4EBP1.
Based on the results of preclinical and clinical research, scientists believe that compounds activating SHIP1 may reduce the function and migration of immune cells producing an anti-inflammatory effect. In addition, because SHIP1 is predominantly present in immune cells, off-tissue toxicities may be minimized.
De Novo protein development
Neoleukin’s lead product candidate, NL-201, is a combined IL-2 and IL-15 agonist designed to eliminate alpha receptor binding. The new protein mimics the action of a key immune regulatory protein, interleukin 2 (IL-2).
In the development of the new protein, the scientists used a de novo computational approach for designing proteins that recapitulate the binding sites of natural cytokines, but are otherwise unrelated in topology or amino acid sequence.
The resulting product bind to the IL-2 receptor βγc heterodimer (IL-2Rβγc) but has no binding site for IL-2Rα (also called CD25) or IL-15Rα (also known as CD215).
Utilizing sophisticated and proprietary computational methods to design de novo protein therapeutics, Aquinox will acquire Neoleukin in exchange for a combination of common and preferred shares. In addition, Aquinox will be renamed as Neoleukin Therapeutics and is expected to trade on the Nasdaq Global Market under the new ticker symbol “NLTX”, concurrent with closing.
The combined company will focus on the development and commercialization of computationally-designed protein therapeutics to address significant unmet medical needs in immuno-oncology, inflammation, and autoimmunity. Neoleukin’s lead product candidate, NL-201, is a de novo protein designed to mimic the therapeutic activity of the cytokines interleukin-2 (Il-2) and interleukin-15 (Il-15) for the treatment of various types of cancer by activating both T-cells and NK-cells to fight cancer, while limiting toxicity with minimal loss of activity.
“Neoleukin Therapeutics is a new company based on sophisticated computational technology licensed from the Institute for Protein Design and the University of Washington that enables us to design and create de novo proteins as therapeutic candidates,” said Jonathan G. Drachman, M.D., CEO of Neoleukin Therapeutics.
“In January, our scientific founders published their seminal findings in the journal, Nature. Since then, we have been advancing our lead program, NL-201, toward IND-enabling studies. The merger with Aquinox is transformational for our company, providing additional capital to prepare an IND submission, generate clinical data, develop additional preclinical programs, and advance our computational technology. We believe that cytokine mimetics, or Neoleukins™, have the potential to offer enhanced therapeutic effects with fewer toxic side effects,” Drachman added.
“Since announcing our plans to seek and consider strategic alternatives for Aquinox, our priority has been to identify a merger candidate we believe has the potential to continue our mission to help patients and provide meaningful value to our stockholders,” David J. Main, President & CEO of Aquinox, explained
“Following an extensive evaluation and diligence process, the Aquinox Board of Directors concluded that a merger with Neoleukin, with a strong platform technology, seasoned leadership team, and compelling clinical development plan, offered an excellent opportunity to create such value. We believe Neoleukin represents an attractive merger partner for Aquinox, offering a novel approach to creating de novo proteins for patients with unmet medical need,” Main concluded.
The merger between the two companies is generally seen by industry experts as an on-ramp to facilitate public financing designed to push Neoleukin’s computationally designed drug development platform forward.
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