East Coast Life Sciences Roundup: Third Rock, SciFluor, Cubist
Another act in a stark boardroom drama unfolded this week for a public pharmaceutical company in New Jersey, but brighter stories took center stage in the Massachusetts biomedical arena.
—A sweeping executive shakeout continued at Optimer Pharmaceuticals on Wednesday as CEO Pedro Lichtinger agreed to resign, and was replaced by Henry McKinnell, the former CEO of Pfizer (NYSE: PFE). Optimer (NASDAQ: OPTR), based in Jersey City, NJ, and San Diego, CA, also swapped in a new general counsel. Optimer markets a new antibiotic, fidaxomicin (Dificid), for infections with C. difficile, the treacherous bacteria commonly found in hospitals. The company said it will now assess “strategic alternatives.”
—By contrast, Third Rock Ventures seems to be headed for one of those happy endings dreamed of by all who risk their fortunes in the biomedical arena. The venture firm based in Boston and San Francisco could reap a 20-fold return on its investment in a company it founded in 2011, Cambridge, MA-based Lotus Tissue Repair, which is being acquired by Dublin, Ireland-based Shire (NASDAQ: SHPG). In an SEC filing Monday, Shire revealed that it will pay $49.3 million up front and as much as $275 million more if Lotus meets certain milestones. Third Rock, the sole venture investor, held a 73 percent stake in Lotus when Shire announced the acquisition last month.
—Third Rock is also one of the venture investors that backed an $11.5 million Series A financing announced this week for Kala Pharmaceuticals of Waltham, MA, which is trying to develop a topical eye drug to compete with medicines that must be injected into the eye to stave off blindness in the elderly. Crown Venture Fund led the VC syndicate that also includes Lux Capital Management and Polaris Venture Partners. If Kala succeeds in creating a needle-free new drug for the condition called wet age-related macular degeneration, it will compete in a $4 billion global market with Genentech’s two drugs ranibizumab (Lucentis) and bevacizumab (Avastin), and Regeneron Pharmaceuticals’ afilbercept (Eylea).
—Concert Pharmaceuticals of Lexington, MA-based struck a deal worth as much as $120 million with Dublin, Ireland-based Jazz Pharmaceuticals (NASDAQ: JAZZ) to try to develop an improved form of a Jazz drug whose patents start to expire in 2019. In a deal announced this week, Jazz will make an undisclosed upfront payment and up to $120 million in milestone payments for the rights to Concert’s modified forms of sodium oxybate (Xyrem), a treatment for narcolepsy, which keeps people sleepy during the day.
—Concert reinvents existing drugs by inserting a stable isotope of hydrogen called deuterium, which forms more stable bonds with other atoms than does hydrogen. The startup SciFluor Life Sciences of Cambridge, MA is pursuing a similar tactic by replacing hydrogen atoms with fluorine, which forms bonds stronger than deuterium. Such fortified chemical bonds can slow the breakdown of a drug in the body, so that lower doses may deliver the same benefits as higher ones that cause side effects—a goal for Concert’s narcolepsy drug and SciFluor’s drug candidates. SciFluor CEO Arthur Hiller, who is seeking partnerships with pharmaceutical firms, says these advances in medicinal chemistry can turn older drugs into best-in-class drugs.
—Cubist Pharmaceuticals of Lexington, MA (NASDAQ: CBST) added to the deal news this week when it announced Monday it has obtained the right to buy San Francisco-based Adynxx pending the results of Adynxx’s mid-stage trial of a novel pain reliever, the experimental compound AYX1. The drug is designed to block a pathway that sends pain signals to the brain, and is being tested in patients undergoing surgery. Cubist is making an upfront payment to Adynxx for the purchase option, with further undisclosed compensation if the acquisition goes through.