Portola Grabs $45M Upfront From Biogen Idec to Develop Autoimmune Drugs

10/27/11Follow @xconomy

South San Francisco-based Portola Pharmaceuticals has formed a lucrative alliance today with Biogen Idec (NASDAQ: BIIB) to co-develop drugs for autoimmune diseases, seeking to stop the immune system from attacking healthy tissues like a virus.

Under the deal, Portola is granting Weston, MA-based Biogen Idec an exclusive worldwide license to co-develop oral pills that block a biological target called Syk. In return, Biogen Idec has agreed to pay Portola $45 million upfront, with $36 million coming in cash, and the rest from an agreement to buy a $9 million equity stake in the smaller company. Portola is also eligible for $508 million in future payments if the drug program reaches certain development and regulatory milestones, the companies said. Biogen will lead development and the commercial push for the oral Syk inhibitor program in two big markets—rheumatoid arthritis and lupus—while Portola will retain the lead development role for the drug in smaller markets.

Biogen and Portola have agreed to a 75/25 split of the worldwide costs and profits of the drug program.

“This program is an excellent strategic fit with our focus on immunology,” said Biogen Idec CEO George Scangos, in a statement. “Portola is a high-quality company with a great track record in small molecules, and we have crafted a collaboration that truly is a win for both companies. We will now focus on a thoughtful and aggressive program to fully explore the potential of Portola’s compounds against this very interesting target, with the goal of creating an effective, safe and convenient oral treatment for patients with debilitating autoimmune and inflammatory diseases.”

Biogen Idec is the world’s largest maker of drugs for multiple sclerosis, a neurodegenerative disease in which the immune system goes haywire and attacks the fatty coating around nerve fibers. Last year, it scrapped a number of programs in its pipeline, including cancer drugs, to focus more on what it considers this strength.

Portola’s lead drug candidate is still at the earliest phase of clinical development, with a code name of PRT062607. Portola has raised a ton of venture capital in its history, around $220 million as of July 2009. Its backers include Abingworth Management, Advanced Technology Ventures, AllianceBernstein, Alta Partners, Brookside Capital, CIDC Consulting, D.E. Shaw, Frazier Healthcare Ventures, Goldman Sachs, IBT Management Corp., MPM Capital, Prospect Venture Partners, Sutter Hill Ventures, Teachers’ Private Capital, T. Rowe Price, Apothecary Capital, Janus Capital and PAC-Link BioVentures.

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