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Acceleron Snags $498M Deal With Shire to Develop Muscular Dystrophy Drugs

Xconomy Boston — 

Shire has got to be feeling a little extra bounce in its step, as one of its competitors (Genzyme) has wobbled recently, and today it’s continuing its bold push forward in the world of rare diseases in a big partnership with Cambridge, MA-based Acceleron Pharma.

Shire (NASDAQ: SHGPY), the U.K-based company that’s become an increasingly potent rival to Cambridge, MA-based Genzyme during that company’s recent manufacturing struggles, said today it has struck a deal in which it will pay Acceleron as much as $498 million to co-develop and co-market drugs that treat muscle disorders like Duchenne Muscular Dystrophy. Acceleron will get a $45 million upfront cash payment, and the two companies will move ahead with a mid-to-late stage development program. Shire gets the commercial rights outside North America, while Acceleron retains the commercial rights on this continent.

“The structure of this collaboration allows Acceleron to retain commercial rights in North America with the opportunity to build a highly valuable business while collaborating with an ideal partner,” said John Knopf, Acceleron’s CEO, in a statement. “Shire’s international presence and their proven leadership and dedicated focus on orphan diseases forms the basis for a successful collaboration.”

The key to the deal is Acceleron’s experimental protein drug, ACE-031, which is designed to build muscle by interacting with a receptor on cells known as activin receptor type IIB. The Acceleron drug is unusual, in that it’s a genetically engineered fusion protein that takes part of the receptor itself and combines it with a fragment of an engineered antibody that has targeting capability. While ACE-031 is the prime asset, Shire has also obtained rights to alternative molecules Acceleron has developed against the same target receptor, which could be useful for other muscle disorders.

The Acceleron drug has shown in animal studies that it can increase muscle mass and improve strength in animals, regardless of whether they have a specific genetic mutation. Other companies, like Bothell, WA-based AVI Biopharma and Netherlands-based Prosensa, have been pursuing RNA-based drugs to treat the disease in a different way. Genzyme, Shire’s main competitor, also formed a partnership two years ago with South Plainfield, NJ-based PTC Therapeutics which includes a treatment for Duchenne Muscular Dystrophy. That drug candidate failed in a mid-stage study last spring.

There is no FDA approved drug today that alters the course of muscular dystrophy, but all the biotech companies see big commercial potential in a treatment for this genetic disease. It primarily affects boys, and makes it difficult for them to walk, breathe, and otherwise play like normal kids. Duchenne Muscular Dystrophy is said to affect about one out of every 3,500 boys at birth.

For Acceleron, today’s deal isn’t the first validation it’s gotten from a big partner. The company, founded in 2004, has a partnership with Summit, NJ-based Celgene (NASDAQ: CELG) for a treatment against cancer-related bone loss. Waltham, MA-based Alkermes (NASDAQ: ALKS) has also invested $10 million in Acceleron to help it make a more convenient treatment for rheumatoid arthritis that could compete with Amgen’s multi-billion dollar hit drug etanercept (Enbrel). The financial support of its venture capitalists (Advanced Technology Ventures, Flagship Ventures, OrbiMed Advisors, and Venrock Associates to name a few), and corporate partners, has enabled Acceleron to build a staff of more than 150 employees and invest in manufacturing facilities at a time when few small biotechs can afford to pursue such bold plans. This new Shire deal certainly won’t discourage the company from thinking big.