Vyriad, a company in southeastern Minnesota that is designing viruses to selectively kill cancer cells, has signed a major agreement with the biotech drugmaker Regeneron to collaborate on drug therapies to target melanoma and cancers of the lung, liver and uterus.

A Vyriad spokesman said the agreement would lead to a doubling of the 20-person workforce that Vyriad and its “sister” company, Imanis Life Sciences, share in Rochester. Vyriad is also planning to expand its research and manufacturing space, moving it out of the Mayo Clinic and into a new 25,000-square-foot facility.

Vyriad has a close relationship with Mayo, using intellectual property licensed from the Mayo Clinic and having been co-founded by Mayo researcher Dr. Stephen Russell, who founded the clinic’s Molecular Medicine Department and built an oncolytic virotherapy program there.

The relationship is a big reason Vyriad remains in Minnesota. Russell said in an interview that Vyriad has heard feedback from private venture-capital firms that have said they would be more likely to invest in Vyriad if the company moved to a traditional biotech hub like Boston or San Francisco. But Vyriad’s close link with Mayo and the Rochester community is too important for the company to leave town.

“The link with Mayo Clinic is enormously valuable to the company. We are built on technology that was developed at Mayo Clinic, and there is a pipeline of related technologies being developed at Mayo. The founding scientists live in Rochester. They work at Mayo Clinic,” Russell said. “In addition, there is the DMC [Destination Medical Center] effort going on, and there is a definite will in the community to build biotech in Rochester.”

Unlike venture-capital firms that were overly concerned about recruiting top executive talent to southeastern Minnesota, Regeneron was more interested in whether the collaboration was scientifically sound, Russell said.

Under the collaboration agreement with Regeneron, the New York-based drugmaker made an equity investment in Vyriad’s Series B fundraising round. Following a successful closing of a $10 million Series A round in 2017, Vyriad’s ongoing Series B round has raised $24.4 million toward its goal of $37.8 million, including the Regeneron contribution, according to a filing with the Securities and Exchange Commission.

Regeneron’s equity investment comes in addition to a cash payment of undisclosed size made to Vyriad as well. The deal gives Regeneron the ability to exclusively license a Vyriad compound called Voyager-V1 and other products developed under the collaboration, while Vyriad will work exclusively with Regeneron to research and develop vesicular stomatitis virus (VSV)-based treatments.

“We are thrilled to partner with Regeneron in this far-reaching collaboration to develop novel cancer treatments,” Russell said in the company announcement. “We are confident that the clinical combination of Voyager-V1 with Libtayo will result in effective anti-cancer activity

Libtayo, developed and commercialized jointly by Regeneron and Sanofi, is a type of human monoclonal antibody known as a PD-1 inhibitor that, when concentrated into a biologic drug, encourages the immune system to release more cancer-killing T cells. Doctors believe Libtayo can be used in combination with Vyriad’s investigational intravenous drug candidate Voyager-V1, an engineered VSV that attacks specific cancer cells, activates the anti-tumor immune system, and potentially causes further PD-1 inhibition to kill cancer cells.

 

Correction: A previous version incorrectly reported the size of Vyriad’s new research and manufacturing facility.