Tolerx and GSK Ink Deal Worth Up to $760 Million

10/23/07

In perhaps the biggest vindication to date of a field that torpedoed a couple of Boston-area firms years ago, Cambridge, MA’s Tolerx announced today that is has signed an agreement with GlaxoSmithKline (NYSE: GSK) that could be worth up to $760 million.

Tolerx is developing treatments for autoimmune and inflammatory diseases, including type 1 diabetes, using an approach called “tolerance”—hence the company’s name. The basic idea is to train patients’ immune systems, which in these diseases overzealously attack the body’s own molecules, to tolerate whatever they’ve been reacting against. But the approach has been a notoriously difficult one, ultimately undoing local firms such as ImmuLogic Pharmaceutical and BioTransplant right around the time Tolerx was founded. (For more on Tolerx, and the history of the firm, see David Stipp’s great profile of the 7-year-old firm.)

So today’s announcement marks something of a milestone both for tolerance and for Tolerx. Under the terms of the agreement, which centers on a Tolerx antibody-based drug that’s currently undergoing clinical trials as a treatment for diabetes and psoriasis, the biotech will get an upfront payment of $70 million dollars. Additional payments totaling up to $680 are also on the table, depending on approvals of the drug for various indications and sales. If and when Tolerx decides to go public, GSK will buy up to $10 million of the firm’s stock.

Tolerx has another antibody drug currently in clinical development, a treatment for cutaneous lupus erythematosus that it’s developing in collaboration with Genentech.

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