UPDATE 2-GSK, iTeos to develop cancer drug in up to $2 bln deal

(Adds details on GSK pipeline, GSK quote, share move)

June 14 (Reuters) - Britain's GlaxoSmithKline Plc
has agreed to pay up to $2 billion to iTeos Therapeutics Inc
to develop and sell a potential cancer treatment
together, the companies said on Monday.

Boston-based iTeos, whose shares jumped 52% in premarket
trading, will receive a $625 million upfront payment and is
eligible to get up to $1.45 billion more if the programme meets
certain development and commercial milestones.

GlaxoSmithKline is under pressure to shore up its drug
pipeline after a report that U.S. activist investor Elliott
built up a significant stake in the company. The British
drugmaker is also preparing to outline plans to split its
consumer products business from its drug operations.

The iTeos deal is to develop EOS-448, a monoclonal antibody
that acts as an anti-TIGIT agent, which showed promise in early
studies.

Anti-TIGIT treatments are new experimental immunotherapies
against certain cancer types. These treatments, including
Roche's tiragolumab and Merck & Co
vibostolimab, are designed to deactivate a tumour's ability to
evade the immune system.

GSK's chief scientific officer Hal Barron, said
immuno-oncology had "transformed cancer care" but that less than
30% of patients respond to treatment with the current leading
immune checkpoint inhibitors.

The deal with iTeos will make GSK the only company with
antibodies targeting the three known checkpoints, which
sometimes keep the immune system from fighting cancer cells, GSK
said.

EOS-448 is currently being tested in an early-stage study in
patients with advanced solid tumours. GSK and iTeos plan to
start combination studies of EOS-448 with GSK's recently
approved cancer drug dostarlimab in 2022.

ITeos is eligible to get milestones and royalty payments on
sales outside the United States, and the two companies will
share both costs of the development and profits in the United
States.

(Reporting by Vishwadha Chander in Bengaluru; Editing by Devika
Syamnath and David Evans)