Durham-based Heat Biologics has inked a deal to acquire an 80 percent controlling interest in Pelican Therapeutics Inc., an immuno-oncology company based in Austin, Texas.

The deal pays up to $500,000 up front to Pelican shareholders, which also includes stock, milestones, sublicensing, income payments and loans.

The deal offers distinct benefits to Heat.

Pelican received a highly competitive $15.2 million New Company Product Development Award from the Cancer Prevention and Research Institute of Texas (CPRIT), which should enable the company to advance multiple products through preclinical development and at least one program through a 70-patient Phase 1 clinical trial.

Pelican’s T-cell costimulator, PTX-25, also addresses a need Heat founder and CEO Jeff Wolf has said would improve its own platform technologies, ImPACT and ComPACT. It has the potential to enhance the durability of T-cell response.

Heat’s ImPACT technology changes live human cells into pumps that secrete cancer antigens, stimulating the patient’s immune system to destroy cancer cells.

Heat saw disappointing Phase 2 results for its bladder cancer vaccine candidate HS-410 in November, results that sank its stock price by 90 percent. The company reduced its staff by 22 percent. But the company has maintained that data suggests its vaccine approach should work.

The deal with Pelican may help increase the immune kick of Heat’s own products, which include a small-cell lung cancer therapy.

“The acquisition of Pelican aligns with our strategic focus targeting exciting immuno-oncology combinations, strengthening Heat’s portfolio in the emerging T cell activation space,” said Wolf in the announcement.

“Pelican’s PTX-25 has the potential to dramatically improve the durability of antigen-specific immune responses due to its preferential specificity for stimulating the production of ‘memory’ CD8+ T cells,” explained Jeff Hutchins, Ph.D., Heat’s chief scientific officer and senior vice president of preclinical development.

Pelican also has a strong tie to Heat. Taylor H. Schreiber, M.D., Ph.D., a director on the Pelican board and chair of its scientific board, is Heat Biologic’s former chief scientific officer and remains chair of its scientific and clinical advisory board.

Schreiber is co-inventor of significant elements of Heat’s ImPACT and ComPACT immunotherapy platforms. He most recently joined Shattuck Labs Inc., another Austin biotechnology company focused on developing technology exclusively licensed from Heat, as its chief scientific officer.

Founded in 2008 to commercialize an immune system stimulating cancer-fighting approach discovered at the University of Miami, Heat moved to the Research Triangle in 2011. The North Carolina Biotechnology Center provided its first funding, a $225,000 Strategic Growth Loan, and later a $3,000 Industrial Internship grant in 2012. Heat raised an additional $5 million in backing as well.

The company launched its IPO in 2013, raising $25 million.

(C) N.C. Biotechnology Center