Armo Biosciences has raised $67 million to expand its late-phase immuno-oncology program and move an anti-PD-1 antibody into the clinic. The West Coast biotech signed up new Chinese backers and returned to existing investors such as Celgene and GV to put together the financing round.

New investor Qiming Venture Partners led the series C-1 round. Qiming was joined by its Chinese compatriot and fellow new investor Decheng Capital, plus two more first-time supporters and the backers that drove Armo to its $50 series C round last year. The list of returning investors includes Alphabet’s GV, Celgene, Kleiner Perkins, OrbiMed and DAG Ventures.

Raising the round positions Armo to expand the late-phase program for its long-acting form of recombinant human interleukin 10, AM0010. Armo began a pivotal trial of AM0010 in pancreatic cancer patients after raising the series C last year. And, buoyed by AM0010-anti-PD-1 combination data presented at the ASCO 2017 Annual Meeting, it now plans to start phase 2/3 trials in renal cell and non-small cell lung cancer. 

IL-10 receptors, the target of AM0010, and PD-1 are both expressed by CD8+ T cells. As research suggests hitting IL-10 dials up the cytotoxicity and proliferation of these cells, Armo thinks the addition of its drug to PD-1 checkpoint inhibitors will improve outcomes. Merck also has an IL-10 drug—MK-1966—in the clinic, but it is testing the candidate with Dynavax's TLR9 agonist SD-101, not its checkpoint inhibitor Keytruda.   

Armo tested its idea in the clinical trials that reported data earlier this year by combining its IL-10 drug with Bristol-Myers Squibb’s Opdivo and Merck’s Keytruda. In the longer term, Armo could use its own PD-1 drug in the combination.

Some of the series C-1 money is earmarked for moving anti-PD-1 antibody AM0001 into the clinic next year. Armo isn’t claiming its PD-1 drug will outperform Opdivo and Keytruda. Rather, its pitch for the drug is that it has "similar characteristics" to these incumbents. 

That leaves little scope for the drug to succeed as a monotherapy without undercutting the competition. But as the immuno-oncology field moves into its next phase, plenty of companies see value in owning PD-1 drugs for use in combination therapies, as evidenced by deals struck by firms such as Celgene. 

Armo is also working on IL-15 and IL-12 drugs that it sees boosting the anti-tumor effect of its lead IL-10 asset. Companies including Novartis and Patrick Soon-Shiong’s NantKwest are trialing IL-15 oncology drugs, while Merck KGaA and Neumedicines have IL-12 cancer programs in the clinic. 

Neither the IL-15 nor IL-12 program got a mention in Armo’s statement about its plans for the $67 million. The only other drug that did targets LAG-3, a molecule that, like PD-1, is expressed on the surface of "exhausted" CD8 T cells. 

Suggestions of synergies between LAG-3 and PD-1 have led a who’s who of immuno-oncology players to move assets into human testing. Bristol-Myers, Novartis, Regeneron and Tesaro already have LAG-3 drugs in the clinic. Yet, as with its PD-1 program, Armo and its investors see value in moving a LAG-3 candidate forward for use in an anticipated slate of combination therapies. 

"In this ever-changing field of immuno-oncology, the combination of AM0010 with standard-of-care chemotherapy or with checkpoint inhibitors may offer novel and competitive treatment options to patients with several types of difficult-to-treat advanced solid tumors," Armo CEO Peter Van Vlasselaer, Ph.D., said in a statement.