Celgene Buys Avila for $350M, Gaining Promising “Covalent” Drugs
[Updated 1/26/12 8:30 am. See below.] When Avila Therapeutics’ CEO Katrine Bosley spoke with Xconomy in December, she predicted the oncology world would show “a lot of excitement” for drugs that inhibit an enzyme called Bruton’s tyrosine kinase (Btk)—and in particular for Avila’s experimental compound in that category, AVL-292. Her words were prescient: Today Summit, NJ-based Celgene (NASDAQ: CELG) announced that it is buying Avila, which is based in Bedford, MA, for $350 million, plus up to $575 million in milestone payments.
[Historical material added.] AVL-292 is part of a class of compounds Avila developed called “covalent” drugs. Covalent molecules bind tightly to disease-causing proteins, thereby shutting down their activity for a prolonged period of time. AVL-292 is also extremely targeted, meaning it blocks Btk with little effect on healthy processes in the body. That’s important—the drug industry has been interested in Btk inhibition for years, but struggled to achieve the right balance between efficacy and selectivity, Bosley told Xconomy last month. Avila’s co-founder Juswinder “Jus” Singh (pictured above), a computational chemist formerly of Biogen Idec, had the idea to develop a class of drugs that could form covalent bonds with proteins.
AVL-292 is currently in Phase 1 clinical trials for non-Hodgkin’s lymphoma, B cell chronic lympocytic leukemia, and rheumatoid arthritis. In December, Avila presented data at the American Society of Hematology (ASH) annual meeting showing that five out of six patients with chronic lymphocytic leukemia who received AVL-292 remained stable on the drug. Blood tests showed that the largest of the two doses tested inhibited Btk over the long run and was well tolerated.
Celgene has been quite active in the Boston area over the last few months. In October, it extended a partnership with Cambridge, MA-based Agios, adding $20 million to what was already a $130 million deal. And in December, Celgene participated in a $30 million funding of Cambridge, MA-based Acceleron, which is working with Celgene on two drugs to treat anemia.
In today’s announcement, Celgene said Avila’s covalent-drug platform would augment its own research efforts in developing novel drugs for complex disorders. “In particular, we see Avila’s unique approach to protein silencing as an area of great promise for our research initiatives in hematology, oncology and immune-inflammatory diseases,” said Tom Daniel, president of research and early development for Celgene, in the statement.
The deal includes a potential $195 million in milestone payments for the development and approval of AVL-292, as well as up to $380 million in potential milestone payments related to other drug candidates that emerge from Avila’s covalent-drug platform, which it calls Avilomics. In today’s announcement, Bosley lauded Celgene’s leadership in hematology and autoimmune disease. “We believe working together may accelerate the advancement of more innovative medicines from the Avilomics platform,” she said.
[Paragraphs added to provide historical background and input from Polaris Ventures.] Avila board member Amir Nashat said in an e-mail that today’s deal demonstrates the value of betting on unproven and risky new technologies. Nashat is a partner at Waltham, MA-based Polaris Venture Partners, which was an early investor in Avila. Co-founder Singh’s model, Nashat says, “had a number of skeptics. While many of the top selling drugs on the market formed covalent bonds with their targets, the irreversible interactions were serendipitously discovered after the fact. Ironically, no one in industry had thought to develop a platform for discovering covalent drugs, believing the approach to be too risky.”
Avila raised $21 million in a Series A in 2008 from Polaris, Atlas Venture, Abingworth Management, and Advent Venture Partners. The following year, it raised $30 million in a Series B led by the Novartis Option Fund. The company also had relationships with Sanofi and Clovis Oncology. Its research deals had a combined potential value of $1.5 billion, Nashat says. “Avila’s joining with Celgene is a great fit,” he says. “The combination of two great companies and their research and development teams will accelerate the advancement of more innovative medicines.”