Wave Life Sciences, the RNA-drug maker that went from Series A funding to initial public offering in less than a year, has received an equity investment from Pfizer as part of a deal to collaborate with the pharma giant on treating metabolic diseases. Pfizer will pay Wave $40 million up front, and the deal is worth hundreds of millions in potential milestone payments.
Wave (NASDAQ: WVE) develops RNA drugs it hopes will last longer in the body and be safer and more potent than related drugs made by other companies, as Xconomy’s Ben Fidler wrote when the company raised $102 million in an IPO in November. Wave now plans to work with Pfizer’s hepatic technology to develop five therapeutics, which Pfizer (NYSE: PFE) has the exclusive rights to license for development and commercialization, according to a statement released Thursday.
But the deal also allows Wave to develop other drugs using Pfizer’s hepatic technology, which is used to enhance the delivery of a drug to the liver, the companies said in the prepared statement. If it does so, Wave may need to pay Pfizer undisclosed milestone and royalty payments, the companies said.
Of the $40 million upfront payment, $30 million is an equity investment from Pfizer. The New York-based pharmaceutical company is paying $16 per share for Wave equity, the same per-share price Wave’s stock sold at in its November IPO. The five potential candidates that Wave will pursue with Pfizer could earn the company as much as $871 million—if each one meets all development, commercialization, and royalty milestones.
Wave has had an active year. Before the IPO, it raised a $66 million Series B round in August, when it added crossover investors to its list of venture capital backers. The company has developed a proprietary chemistry method that controls the “chirality”—chemistry’s version of handedness—of the RNA molecules it produces, Xconomy reported at the time. Wave’s contention is that chirality is important for RNA drugs, and that ignoring it can lead to less pure and less effective therapies. (More on that in a story on Wave’s $18 million Series A round in February 2015.)
Wave was formed from the merger of two small companies: Chiralgen of Japan and Boston’s Ontorii. Its name is an amalgam of the last names of each company’s scientific founders.
Teva Pharmaceutical Industries has also invested in Wave.