New drugs for fibrosis, an internal, often deadly type of scarring, have become the centerpiece of a number of biotech deals over the past few years. The latest just crossed the wires this morning, as Bristol-Myers Squibb has just nabbed an option to buy Promedior, of Lexington, MA.
Bristol-Myers (NYSE: BMY) is paying $150 million up front for the exclusive right to acquire Promedior later on. Should Bristol exercise that option and buy Promedior, it could shell out a total of $1.25 billion in various payments for the company. Those payments include a fee for triggering the buyout, and various clinical and regulatory milestones.
For those unfamiliar with Promedior, the company was formed in 2006 and originally based in Malvern, PA. It’s headed by Suzanne Bruhn (pictured above), who spent most of her career at Transkaryotic Therapies (acquired by Shire in 2005) and had a hand in developing biologics for rare diseases like Fabry disease (aglsidase alfa, sold as Replagal) and Gaucher (velaglucerase alfa, sold as Vipriv) and took over as Promedior CEO in May 2012. The company has raised a total of $76 million in venture dollars from the likes of Polaris Partners, Shire, and Morgenthaler, and has been developing a drug called PRM-151 for two types of fibrosis—idiopathic pulmonary fibrosis (IPF) and myelofibrosis (MF).
Despite recent turmoil in the markets, the IPO window is still open for startup biotechs who want to stay independent and grow. Bruhn says the company considered a lot of different options (she wouldn’t specify which ones), but took the option deal with Bristol because “strategically, the alignment was terrific [between the two companies].”
“We really thought this kind of structure made sense for where we were, where they were, and where the trials were in terms of planning,” she says.
According to Bruhn, none of the $150 million up front payment from Bristol will go to Promedior’s shareholders. They’d only see returns off of payments down the road, she says.
IPF is an often deadly scarring of the lungs with no known cause, and it’s been the subject of several deals over the past few years. Bristol, in fact, already bought a startup—San Diego’s Amira Pharmaceuticals—for an IPF drug in 2011. That drug, now named BMS-986020, is now in Phase 2 testing. Some other deals include Biogen’s (NASDAQ: BIIB) buyout of a Boston area startup called Stromedix for an IPF drug in 2012, and most recently, Roche’s $8.3 billion acquisition of Intermune in August of last year.
Myelofibrosis, meanwhile, is a rare and potentially fatal kind of leukemia with only one approved drug—Incyte’s (NASDAQ: INCY) ruxolitinib (Jakafi). But it treats the symptoms rather than the cause of the disease, and often leaves patients needing blood transfusions. Still, there are plenty of other companies developing MF drugs, among them Gilead Sciences (NASDAQ: GILD), Geron (NASDAQ: GERN), and CTI Biopharma (NASDAQ: CTIC).
Promedior’s PRM-151 is a little different than most of the others in that it doesn’t target the janus kinase, or JAK family of enzymes. JAK enzymes are involved in signaling pathways that help abnormal stem cells grow; these cells crowd out healthy cells in MF patients, scarring the bone marrow. PRM-151 is based on pentraxin-2, a naturally occurring protein in humans that is meant to work as a switch to halt and possibly reverse the formation of scar tissue. The idea is that cells that would otherwise develop into damaging tissue instead help the bone marrow heal.
PRM-151 has been given orphan drug designations from FDA and European regulators in both MF and IPF, and Bristol expects to have Phase 2 trials of the drug in both diseases started “in the coming weeks.” Bristol can decide whether to buy Promedior after at least one of those trials wrap up.
Bruhn says that the MF trial is a “continuation” of the one that is already underway. That’s an adaptive, two part study that the company started last year. The IPF trial is the one that hasn’t begun yet, though Bruhn says data from both could come in 2017—likely when Bristol will make its big decision on Promedior.
“We had a fully baked clinical development plan in hand that Bristol has signed off on,” Bruhn says.