Proteostasis Nabs Partnership, $20M Investment, from Elan To Pursue Neurology Drugs

5/25/11Follow @xconomy

Cambridge, MA-based Proteostasis Therapeutics has found a big new benefactor to support its R&D against neurological diseases.

Proteostasis said today it has formed a strategic alliance with Ireland-based Elan to develop traditional small molecule drugs and diagnostics with Proteostasis against neurodegenerative diseases like Parkinson’s, Huntington’s, and multiple sclerosis. Elan, the developer of the hit multiple sclerosis drug natalizumab (Tysabri), has agreed to invest $20 million into the small company, and may pump in another $30 million over the next five years. In return, Elan is getting a 24 percent ownership stake in Proteostasis now, a seat on its board of directors and scientific advisory board, and the first chance to exclusively license new drug compounds from the collaboration, the companies said in a statement.

Proteostasis has been pretty quiet lately, but it made a splash in the Boston biotech scene in September 2008 when it raised a whopping $45 million in its initial venture financing from HealthCare Ventures, Fidelity Biosciences, New Enterprise Associates, Novartis Option Fund, and Genzyme Ventures. The founding science came from the San Diego labs of Jeff Kelly at The Scripps Research Institute and Andrew Dillin at the Salk Institute for Biological Studies, and Richard Morimoto at Northwestern University.

As I described in a feature story a year ago, Proteostasis is about delving into biology that seeks to alter protein pathways that deteriorate as people age, which can lead to neurodegenerative diseases like Alzheimer’s and Parkinson’s. When people are young and healthy, they might produce amyloid plaques, for example, but a network of proteins works to dispose of them. One theory is about Alzheimer’s is that as people age, this garbage disposal network weakens, amyloid plaques build up, and it leads to the cognitive impairment in the brain that’s associated with Alzheimer’s.

Today’s statement had a few details on what each party is supposed to bring to the table. It said that Proteostasis will contribute its discovery technology, novel biological targets, and drug candidates. Elan plans to contribute with its proprietary animal models, biology, medicinal chemistry, and clinical development.

Proteostasis’ president and chief scientist, Peter Reinhardt, said Elan is “a proven leader” who will help speed up the R&D progress at Proteostasis. Kelly Martin, Elan’s CEO, added: “This initiative with Proteostasis reinforces our commitment and strategic business objective of being an exceptionally high-caliber, science-driven company and provides a multitude of opportunities for Elan to advance its position as a world leader in the broad field of neuroscience.”

This isn’t the only Boston-Ireland connection we’ve seen in these pages lately. Elan recently agreed to sell one of its divisions to Waltham, MA-based Alkermes (NASDAQ: ALKS) for $960 million in cash and stock.

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