Ono Pharmaceutical Co., Ltd. (Osaka, Japan; President and CEO: Gyo Sagara; “Ono”) today announced that it has entered into a collaboration and option agreement with Cue Biopharma, Inc. (Boston, Massachusetts, USA; CEO: Daniel Passeri, “Cue Biopharma”) for CUE-401, a bispecific protein designed to induce and expand regulatory T cells (Tregs) for the treatment of autoimmune and inflammatory diseases.

 Under the terms of the agreement, Ono will have an exclusive option to license worldwide rights to develop and commercialize CUE-401. Cue Biopharma will also retain an option to develop and commercialize it jointly with Ono in the United States. Ono will make an upfront payment to Cue Biopharma, and upon exercise the option rights, will make milestone payments based on development and commercialization progress to an aggregate of approximately 220 million US dollars, as well as tiered royalties on net sales. During this option period, Cue Biopharma will be responsible for the research and development of CUE-401 and Ono will cover the research and development expenses.

 CUE-401 is a bispecific fusion protein designed to induce and expand Tregs through the delivery of transforming growth factor β (TGF-β) and interleukin 2 (IL-2). In pre-clinical studies, CUE-401 demonstrated its induction and expansion of Tregs and has the potential to address a broad range of autoimmune and inflammatory diseases.

 “We appreciate Cue Biopharma’s proprietary platform, protein engineering abilities, as an emerging new therapeutic modality and are thrilled to work with the Cue Biopharma’s biologics team through this collaboration agreement.” said Toichi Takino, Senior Executive Officer / Executive Director, Discovery & Research of Ono Pharmaceutical. “We hope to add CUE-401 into our portfolio to help patients suffering from autoimmune and inflammatory diseases.”

 “This strategic collaboration with Ono Pharmaceutical, a leading Japanese pharmaceutical company with a track record of scientific innovation, is a significant accomplishment for Cue Biopharma, as it allows us to further develop this promising biologic through the support of a strategic partner.” stated Daniel Passeri, chief executive officer of Cue Biopharma. “Through this important partnership we have secured resources and capabilities necessary to help advance CUE-401 towards the clinic, while preserving potential value to our shareholders through a 50:50 collaboration right for the US market.”