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Gilead, Scholar Rock Sign $80M Up Front Deal for Fibrosis Drugs

Xconomy Boston — 

Drugmakers are increasingly turning their attention toward fibrosis, the excessive growth of connective tissue that can lead to scarring and dysfunction of multiple organs including the lungs, liver and kidneys. In the latest deal centered on this disorder, Gilead Sciences (NASDAQ: GILD) will pay Scholar Rock of Cambridge, MA (NASDAQ: SRRK) $80 million up front for exclusive  options to license antibody drugs that inhibit TGF-beta, a protein that  boosts cell growth and is thought to drive fibrosis.

Under the agreement, Scholar Rock (headed by CEO Nagesh Mahanthappa, pictured) will conduct preclinical research up until it picks its drug candidates. After that, Gilead can opt to take charge of the rest of preclinical and clinical work, and commercialize the drugs, if they get that far. The $80 million payment consists of $50 million in cash and the purchase of $30 million in Scholar Rock common stock. The Cambridge-based biotech could receive a one-time payment of $25 million tied to a specific—but undisclosed—preclinical milestone, and up to an additional $1.4 billion in other R&D and commercialization milestone payments across all the fibrosis drugs, as well as royalties, should the drugs reach the market.

Scholar Rock was founded in 2014 to target various growth factors. It’s testing a drug for spinal muscular atrophy in an early-stage trial, and is also working on TGF-beta inhibitors for cancer. It was also one of the many biotechs that went public this year.

Most current fibrosis treatments target organ-specific disorders, but research is showing that fibrosis itself is driven by mechanisms that are common across different organs and diseases, including idiopathic pulmonary fibrosis and liver cirrhosis.

This developing understanding about fibrosis could explain the burgeoning interest from drug companies in the condition. In October, AbbVie (NYSE: ABBV) committed $100 million to another Boston-area biotech, Morphic Therapeutic, to license its fibrosis drugs. And in July, San Francisco-based Pliant Therapeutics raised $62 million to develop its own fibrosis drugs.