When Nimbus Therapeutics started out as a company called Nimbus “Discovery,” it was structured in a way that would allow it to easily sell one of its assets to an acquirer. Though the company has since changed its name, that original decision paid off today: Gilead Sciences is paying as much as $1.2 billion for one of the drugs Nimbus has been working on.
Foster City, CA-based Gilead (NASDAQ: GILD), the biotech giant best known for its drugs for HIV and hepatitis C, is paying $400 million up front for the rights to what’s called “Nimbus Apollo.” This is a Nimbus subsidiary that houses a drug the company is developing for nonalcoholic steatohepatitis, an increasingly common liver disorder and a leading cause of cirrhosis and liver failure. Nimbus—which was co-founded by Atlas Venture and Schrodinger in 2009—could pocket another $800 million in milestones if the drug progresses and succeeds.
The reason Nimbus could pull off this kind of deal is it was first formed as a limited liability company, or LLC, which made it easy to sell off individual drug candidates to buyers only interested in a single program. Other companies like Adimab and Forma Therapeutics have done this as well; it was a good way for venture capitalists to generate quicker exits and shareholder returns in biotech when the IPO window was slammed shut.
As CEO Don Nicholson, pictured above (who will be speaking at our “What’s Hot in Boston Biotech” event on Wednesday) told Xconomy last year, the LLC structure was an “experiment of sorts.” The original intent with Nimbus was to use a computational drug discovery approach to unearth new drugs, find buyers for them, and reap the rewards. But times changed along the way. IPOs became an option for biotechs again, and Nimbus liked what it was seeing from its in-house program. Nimbus began seeing itself as a maker of its own drugs, not just a discovery team for hire, and changed its name to Nimbus “Therapeutics” to reflect the change.
Nimbus never ditched the LLC structure, however, and that came in handy for this deal, because it can sell off its NASH drug while maintaining ownership of its other experimental compounds. As Atlas partner Bruce Booth wrote in a blog post this morning, the structure enabled Nimbus to “[sell] off the eggs,” not the goose.”
“It’s great to see [the model] work in practice, rather than theory,” he wrote.
The company has been developing a NASH drug called NDI-010976 that is currently in early-stage testing—data from that trial will be presented at a medical meeting this year. The drug is aimed at what’s known as Acetyl CoA Carboxylase, or ACC, an enzyme that regulates the creation of fatty acids and is implicated in a number of metabolic functions, such as fat buildup. Fat buildup in the liver, typically from sugary or fatty diets, is a hallmark of NASH. The drug is meant to shut down ACC, and thus stop the fat buildup. (Check out this story for more on NASH, and how Nimbus’s drug compares to some of the others in the field, among them one from Intercept Pharmaceuticals (NASDAQ: ICPT)
This isn’t Gilead’s first foray into NASH. The company in January 2015 agreed to pay as much as $470 million for potential NASH drugs being developed by Germany’s Pfenex Pharmaceuticals. It’s also testing an antibody drug called simtuzumab in two different phase 2 studies for the disease.
“The acquisition of Nimbus’ ACC-inhibitor program represents a timely and important opportunity to accelerate Gilead’s ongoing efforts to address unmet needs in NASH,” Gilead chief scientific officer Norbert Bischofberger said in a statement. “These molecules will complement and further strengthen Gilead’s pipeline and capabilities to advance a broad clinical program in NASH that includes compounds targeting multiple key pathways involved in the pathogenesis of the disease.”