Eleven Biotherapeutics became an eye-disease company several years ago, a move that allowed it to go public, raise a bunch of money, and get an eye drug all the way to a pair of late-stage clinical trials.
Both studies failed, however, which left the Cambridge, MA, company searching for a new direction—which today has been revealed as a plan to develop cancer drugs.
Eleven (NASDAQ: EBIO) has acquired a Toronto biotech called Viventia Bio. The combined company will keep the Eleven name, but take Viventia’s strategy and management team. It’ll develop a group of experimental drugs for squamous cell carcinoma, bladder, and head and neck cancers, and be run by Viventia’s president and CEO Stephen Hurly. Hurly will replace Abbie Celniker, a former Millennium Pharmaceuticals and Novartis executive and Eleven’s longtime CEO, though Celniker will remain on the company’s board of directors.
“As previously announced, Eleven performed an extensive review of our strategic alternatives, and our board of directors believes that the acquisition of Viventia offers Eleven shareholders a compelling opportunity for enhancing long-term value,” Celniker said in a statement.
In the deal, Eleven bought all of Viventia’s shares for 4,013,431 newly issued shares of Eleven common stock, representing about 16.6 percent of the company. Shares of Eleven closed at $3.37 apiece on Tuesday, and climbed about 9.5 percent in pre-market trading. The deal also includes downstream payments and royalties for Viventia’s shareholders if certain regulatory and sales targets are hit, according to a regulatory filing.
The combined company will develop fusion proteins—specifically, antibody fragments genetically fused to toxic proteins—as cancer drugs. Its most advanced drug candidates are Vicinium, which should produce data from a Phase 3 trial in high grade non-muscle invasive bladder cancer in early 2018; and Proxinium, which will begin a mid-stage trial in late-stage squamous cell carcinoma next year.
The move represents another metamorphosis for a company that’s had a few already. Eleven was formed by Third Rock Ventures and Flagship Ventures in 2010 with the idea of custom designing proteins from scratch to possess certain characteristics, like the ability to carry out a specific action on their specific biological target. The company was named after a reference to the infamous rock mockumentary “This is Spinal Tap,” when one of the band members talks of an amplifier that can be cranked up to 11, louder than 10.
In 2011 Eleven hired Celniker, a former Millennium Pharmaceuticals and Novartis executive, as CEO, and morphed into an ophthalmics company. Eleven put much of its focus behind a drug called EBI-005 (later called isunakinra), an eye drop it was developing for inflammation in ocular diseases like dry eye and allergic conjunctivitis. The company went public in February 2014, raising $50 million, and shares closed as high as $17.05 apiece a month later.
But isunakinra went on to fail each of two Phase 3 trials. That wiped out most of Eleven’s value and led it to shelve the drug altogether in January and begin evaluating strategic alternatives, considering everything from an outright sale to divesting assets one by one. Eleven sold off a technology used for drug delivery to Albumedix in January, paid off its outstanding debt to Silicon Valley Bank in March, and licensed a second eye drug, EBI-031, for diabetic macular edema, to Roche in June. Eleven has already gotten $30 million in the Roche deal, and could get up to $240 million more if the drug progresses in clinical testing.
Eleven’s chief development officer Karen Turbidy has resigned from the company following the deal, and Third Rock’s Cary Pfeffer has left the board. An entity associated with Viventia’s former executive chairman, Leslie Dan, is now Eleven’s second-largest shareholder. Third Rock had a 24.5 percent stake in Eleven as of an April proxy filing, making the Boston firm Eleven’s largest shareholder.