Labrys Turns Stalled Pfizer Program into $200M+ Teva Buyout
Labrys Biologics, a San Mateo, CA-based migraine drug company founded by a group of venture firms less than two years ago, is being snapped up by Teva Pharmaceutical (NYSE: TEVA) in a deal that could be worth up to $825 million if things break right.
Teva, the Israeli generics giant, will pay $200 million up front to buy Labrys and its lead drug prospect, LBR-101, a so-called calcitonin gene-related peptide (CGRP) antibody being developed for migraines. Labrys and its investors—venBio, Canaan Partners, InterWest Partners, and Sofinnova Ventures—could see another $625 million in payouts if the drug hits a variety of milestones.
The deal marks a quick victory for the venture group—which put up a $31 million Series A for Labrys in January 2013—and particularly Corey Goodman (pictured above), the neuroscientist and former Pfizer executive-turned venture capitalist who co-founded venBio and started up Labrys. Goodman established Labrys to acquire an antibody drug candidate for migraines that was originally developed by Rinat Biosciences. Pfizer acquired Rinat in 2006, and the program subsequently stalled amid various restructurings. RN-307 was a Phase 2-ready drug when Goodman scooped it up six years later and formed Labrys around it. Pfizer got an unspecified payment up front, and was promised certain milestones, sales royalties, and an unnamed “liquidity payment” if Labrys were to be acquired.
Former KAI Pharmaceuticals CEO Steve James was named president and CEO in late 2012, and VenBio then led the Series A a few months later. Labrys filled out its executive team and then kicked off two Phase 2 studies for the drug in January of this year, testing it in people with chronic and episodic migraines. Now, just five months later, with Labrys’ trials expected to produce top-line data either late this year or early next year, Teva swooped in for the buyout.
In the meantime, CGRP antibodies have become a hot target in a migraine drug race. Bothell, WA-based Alder Biopharmaceuticals (NASDAQ: ALDR), which just went public earlier this year, is developing a competing treatment that produced positive proof-of-concept data a couple months ago. Eli Lilly spun out a CGRP antibody with an $18 million investment from Atlas Venture and OrbiMed Advisors, into a company called Arteaus Therapeutics—and then acquired it as part of a build-to-buy deal in 2013. Amgen is developing one as well. Now the once-stalled Pfizer drug will move forward under the care of Teva, which estimated that about 8.5 million people in the U.S., Europe, and Japan suffer from either chronic or episodic migraines requiring treatment. LBR-101 is a once-monthly drug delivered via an injection just under the skin.
“CGRP is a well-validated target in migraine, and Labrys has progressed the development of LBR-101 with scientific rigor and excellence,” said Michael Hayden, Teva’s president of global R&D and chief scientific officer, in a statement. “With its long half-life, target specificity and favorable pharmacokinetic profile allowing for infrequent, and convenient, subcutaneous administration, LBR-101 represents a very exciting biologic product candidate, and much needed option, for the management of this truly debilitating condition.”