Celgene Pours $15M Into Acetylon, Takes “Observer” Role on Board
New England Patriots owner Robert Kraft may still be smarting from his team’s loss to the New York Giants in the Super Bowl, but at least one of Kraft’s other organizations has some good news to cushion the blow: Boston-based Acetylon said today that it has received a $15 million equity investment from Celgene (NASDAQ: CELG), the biotech giant based in Summit, NJ.
Acetylon was founded in 2008 and backed with $40 million from several individual investors, including Kraft. The company is working on a class of drugs that inhibit enzymes called histone deacetylases (HDACs). These enzymes regulate gene expression and play a role in many cancers. Last fall, Acetylon began human trials of its lead compound, ACY-1215, in multiple myeloma. Celgene is a leader in that field with its blockbuster myeloma treatment lenalidomide (Revlimid). “Celgene has a strong strategic and market interest in hematological malignancies and other cancers, and we will benefit from their guidance and input,” says Walter Ogier, CEO of Acetylon.
In the past, drug developers have tried to inhibit several HDACs at one time, but Acetylon’s compound targets only one, HDAC6. That selectivity may cut down on side effects such as fatigue and nausea—and it was one of the main reasons Celgene was attracted to Acetylon’s research. “Acetylon has established itself as the leader in developing next generation, selective HDAC inhibitors for cancers as well as non-cancer disease indications and we believe the company’s approach could significantly benefit patients,” said Mark Alles, Celgene’s chief commercial officer, in today’s release.
Acetylon’s scientists plan to test ACY-1215 in combination with bortezomib (Velcade), made by Millennium Pharmaceuticals. “We anticipate a similar opportunity to test it in combination with [Celgene's lenalidomide] and potentially the next-generation of the drug,” which Celgene is currently testing in clinical trials, Ogier says.
Celgene’s investment in Acetylon is a pure equity deal, and Celgene will not receive rights or options to the startup’s technology. Alles will take a position on Acetylon’s board as a non-voting observer—meaning he’ll mostly have an advisory role. “They’ll have a closer view on our progress,” Ogier says. As for whether or not Celgene might become interested in forming a closer research alliance in the future, Ogier says, “anything could happen.” In the meantime, the deal “doesn’t preclude us from forming other partnerships,” he says. “I think this is good for both companies.”
Celgene has taken quite a bit of interest in the Boston biotech scene of late. On January 26, the company announced it was buying Bedford, MA-based Avila Therapeutics for $350 million. Last year, Celegene participated in a $30 million funding of Cambridge, MA-based Acceleron and it extended a partnership with Cambridge-based Agios, adding $20 million to a $130 million alliance. In May 2011, Celgene signed on to use Boston-based Foundation Medicine’s genomics testing technology in trials of cancer drugs, with the goal of identifying patients who are most likely to respond well to the medicines.
For Acetylon, the Celgene infusion kickstarts an already ambitious plan for ACY-1215. The company is currently finishing up the first stage of a Phase 1 trial, and plans to begin the combination phase of the trial later this year, Ogier says. The $15 million investment “is significant for a company at our stage,” Ogier says. “It will allow us to augment our cancer program.”