Q32 Bio, a US-based clinical stage biotechnology company, and Ireland-based Horizon Therapeutics plc (Nasdaq: HZNP) announced on Monday that they have signed a collaboration and option agreement to produce ADX-914 to treat autoimmune diseases.

ADX-914 is a completely human anti-IL-7R alpha antibody that re-regulates adaptive immune function by blocking signalling mediated by both IL-7 and TSLP. Q32 has completed a biomarker-enabled Phase one study characterising pharmacokinetics, pharmacodynamics and safety of ADX-914 that showcased pharmacological impact on T cells in healthy volunteers. It is likely to start a Phase two trial in atopic dermatitis later this year and is planning to start a Phase two trial in a second autoimmune disease in 2023.

According to the terms of the contract, Horizon is to fund development via completion of the two Phase two ADX-914 trials, and Q32 will be operationally responsible for conducting all program-related activities. Horizon is to receive an option to acquire the ADX-914 program, exercisable through a period subsequent to the completion of the Phase two trials. During the option period, Q32 will receive $55m in the form of initial consideration and staged development funding, of which Horizon expects to recognize as R&D expenses approximately $32.5m in the third quarter of 2022, and the remainder in 2023. If Horizon exercises the option, Q32 is likely to be eligible to receive up to an additional USD645m in closing and milestone payments, and tiered royalties on net sales, less certain amounts payable under a pre-existing license agreement.