Bristol-Myers Acquires Amira Pharmaceuticals for $325 Million, Scoops Up Lung Drug

7/21/11Follow @xconomy

The people in San Diego who discovered a multi-billion dollar asthma drug for Merck have captured the attention of Big Pharma once again.

Amira Pharmaceuticals, a privately held company in San Diego, has agreed to be acquired by New York-based Bristol-Myers Squibb (NYSE: BMY) for $325 million in cash upfront, plus additional milestone payments of $150 million, meaning the deal could be worth up to $475 million for Amira shareholders. Bristol said in a statement that it plans to retain Amira’s scientists, and keep them in San Diego. Amira had 25 employees at last count, in November.

The key asset in the deal is Amira’s drug for pulmonary fibrosis. This is the disease that damages and scars the lungs, and is probably best-known for the high rate of incidence among first responders to the 9/11 terrorist attacks. There isn’t currently an effective FDA-approved treatment, and the disease makes it hard for people to breathe and ultimately kills an estimated 40,000 people a year. While this is a relatively small patient population, Amira CEO Bob Baltera has pointed out this is a “grievous illness,” which means anybody who comes up with a good drug could have a pretty sizable market opportunity.

Amira’s drug has passed the first phase of clinical trials to demonstrate safety, and is now being prepped for the second stage, in which researchers will get a better sense of its effectiveness.

“Bristol-Myers Squibb has identified fibrotic diseases as an area of high unmet medical need that complements our research efforts in several of our therapeutic areas,” Elliott Sigal, Bristol’s president of R&D, said in a statement.

The acquisition is clearly a big win for Amira and its shareholders. The company was started in 2005 by a trio of scientists-Peppi Prasit, Jilly Evans, and John Hutchinson-who worked together at Merck until that company shut down its San Diego operation. Their biggest accomplishment there was the development of montelukast sodium (Singulair), an asthma drug that generated about $5 billion in sales in 2010. Based partly on that track record, Amira raised more than $28 million in venture capital, most of which came from Novo A/S, Avalon Ventures, Prospect Venture Partners, and Versant Ventures in March 2007.

But money has been tight since then, at Amira, just like many biotech companies with products in the early stages of development. Amira has been supported in most recent years by an asthma drug collaboration with GlaxoSmithKline, although that wasn’t enough to cover all of the company’s R&D expenses. Amira cut half its workforce last November, and its scientific founders left the day-to-day operation as the company sought to conserve cash in a tough climate for early stage biotech financing.

Amira’s lead drug, AM152, is designed to block a novel biological target on cells, known as the LPA1 receptor. That biological pathway’s relationship to pulmonary fibrosis was described by Andrew Tager and colleagues at Massachusetts General Hospital in a paper in Nature in 2008. Scientists said that mice who lack LPA1 were protected from fibrosis and death after being exposed to likely environmental triggers of the disease.

Brisbane, CA-based Intermune (NASDAQ: ITMN) has helped blaze the trail here. Its experimental drug for pulmonary fibrosis failed to win FDA approval, but was cleared for sale in the European Union, which has been enough to boost the company’s market valuation to more than $2 billion. Others, like Gilead Sciences and Novartis have R&D programs against pulmonary fibrosis as well.

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