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Novartis AG to buy out Cambridge cancer drug firm, CoStim Pharma

CoStim will be added to Novartis’ Cambridge-based immunotherapies research team for drug development

The Swiss drug giant Novartis AG, moving to establish itself as a top player in the hot field of cancer treatment known as immunotherapy, on Monday said it had snapped up two-year-old CoStim Pharmaceuticals Inc., a venture-backed Cambridge biotech using research from Boston academic labs.

CoStim, bankrolled by local venture firms MPM Capital and Atlas Ventures as well as Partners Innovation Fund, is developing a pipeline of drugs that stimulate a patient’s immune system to fight cancer. CoStim will be rolled into Novartis’s Cambridge-based immunotherapies research team, which will start with 20 to 30 people but is likely to expand.

The parties did not disclose the purchase price.

Novartis is one of a number of big pharmaceutical companies exploring immunotherapies, which treat disease by spurring, enhancing, or turning off the body’s immune response. Working with collaborators at the University of Pennsylvania, Novartis’s Cambridge-based scientists are removing a type of white blood cells known as T cells from cancer patients, genetically engineering them to combat cancer, and then reintroducing them.

Bill Sellers, global head of oncology at the Novartis Institute for Biomedical Research in Cambridge, said the drugs CoStim is developing — drugs that help T cells block cancer signals without having to remove them — will give the drug maker another research approach.

“We think it will be highly complementary,” Sellers said. “We think the combination of these approaches is a big opportunity.”

Sellers said Novartis plans to move the CoStim team by July from its current research space in the Athenaeum building on 215 First St., near Kendall Square, to a site Novartis is leasing at 64 Sidney St. in the University Park development.

Underscoring its commitment to cancer immunotherapies, Novartis spent $43 million to buy a manufacturing facility for such drugs in Morristown, N.J., from Dendreon Corp. just over a year ago.

The research underpinning CoStim came from a trio of Boston scientists, Vijay Kuchroo, Arlene Sharpe, and Gordon Freeman, working in labs at Harvard Medical School, Brigham and Women’s Hospital, Dana-Farber Cancer Institute, and Boston Children’s Hospital.

CoStim was backed by an MPM-led consortium that included Atlas, Johnson & Johnson Development Corp., and Partners Innovation Fund, a small but growing player in life sciences venture capital.

CoStim’s purchase represents the first time the Partners fund, owned by Partners HealthCare System, the state’s largest hospital and physicians group, has successfully cashed out of an investment.

The seven-year-old Partners fund has invested in 17 companies, all of them seeking to commercialize drug and medical device technology from Partners-owned Massachusetts General and Brigham and Women’s hospitals, said Chris Coburn, vice president of innovation for Partners HealthCare. He said Partners hospitals have benefited in the past by licensing their technology and earning royalties or milestone payments, but not through venture capital.

“This is the first investment to be monetized,” Coburn said. “Getting technology into the clinic is not for the faint of heart from a financial standpoint. This model of very early-stage investment in therapeutic development has been validated. Stay tuned. We expect a lot more.”