Merck Ventures, the strategic investment arm of German pharmaceuticals and life sciences group Merck KGaA, has created immuno-oncology company iOnctura.

Based in Geneva, Switzerland, the spin-out company was formed around two assets from Merck’s Healthcare R&D portfolio and three assets from Cancer Research Technology (CRT), the commercial arm of UK charity Cancer Research.

iOnctura aims to develop a pipeline of selected assets targeting and modulating mechanisms that drive immunosuppression in the tumor microenvironment. Immunosuppression has been shown to be one of the main factors behind patients not responding to first-generation checkpoint inhibitors.

Through its alliances with Merck and CRT, iOnctura has already built up a pipeline of promising programs and has entered into a research collaboration with CRT Discovery Laboratories. In exchange for the exclusive global option to license three immuno-oncology assets from CRT, iOnctura will give CRT an initial stake in the company and will make further payments on achieving certain milestones as well as royalties on net sales.

The newly formed Swiss company has also secured access to future supplies of avelumab, a fully human monoclonal antibody being developed and commercialized by Merck KGaA together with US drugmaker Pfizer, which will enable acceleration into initial clinical proof-of-concept studies.

CEO and co-founder of iOnctura, Catherine Pickering, said the company was optimally positioned to explore novel combination therapies and advance them quickly to cancer patients.

Separately, CRT has signed a further deal with Germany’s Merck to discover new cancer drugs targeting the Hippo signalling pathway, which regulates cell size and controls tissue growth during development and regeneration.

The agreement follows a successful one-year target validation and drug discovery feasibility partnership between CRT’s Discovery Laboratories in both London and Cambridge and Merck in Darmstadt, during which time the partners developed a better understanding of the Hippo pathway’s role in cancer and how best to drug key targets.

Abnormal activation of proteins controlled by this pathway has been linked to the development of a range of cancers, making it an attractive area for the discovery of novel therapies.

The partners have now moved into full drug discovery with the aim of eventually identifying molecules to take into preclinical studies and clinical trials. Under terms of the deal, CRT will receive royalties and milestone payments, which will be invested into the charity’s research.

Ian Foulkes, CRT’s CEO, commented: “We’ve brought together leading academics in the field and industry to build on world-class research, and we’re now focused on developing these early projects for the benefit of cancer patients.”