Avila Therapeutics, after just five years in business and $51 million in venture capital, made big news today when it agreed to be acquired by Celgene for $350 million upfront plus another $575 million in milestone payments.
Naturally, there are a lot of people celebrating the success of the Bedford, MA-based company today around the web and on Twitter.
Over at Polaris Venture Partners’ blog, Amir Nashat wrote that “early, Series A life sciences investing pays off.” He added that this portfolio company is the eighth in the last three years to generate returns, either through acquisition or an IPO. “One common thread that binds each of these companies was their compelling scientific foundation and transformative potential for treating disease. In our model, these areas are essential and go hand-in-hand with strong teams. In the case of Avila, we were fortunate to back a truly unique team of repeat entrepreneurs,” Nashat wrote.
Bruce Booth, a partner at Atlas Venture who also invested in the company, wrote on his blog about how Avila (AH-vill-uh) paid off big-time for its early venture investors. The company raised just $51 million in venture capital its five-year history. The company is generating a 5x return on investment on the upfront payment from Celgene, which has potential to balloon to a 15x return if Avila hits its future milestones.
Booth offers some interesting background on the Avila story, and some lessons in four bullet points. “Avila has exhibited many of the hallmarks of a great biotech story today”: Specifically, he said those hallmarks are:
Commitment to discovering and advancing real innovation
Healthy focus on ‘equity capital efficiency’
Dedication to creating strategic optionality for the company’s future
And, most importantly, a fantastic team
Over on Twitter, Michael Gilman of Cambridge, MA-based Stromedix (@Michael_Gilman) recalled sitting in his living room more than five years ago with Avila co-founder Jus Singh, talking about his idea for the company. “The sweet thing about Avila is that it’s a triumph of data over dogma. People HATED covalent drugs. Avila changed their minds,” Gilman said on Twitter.
You can read the Xconomy story on the deal by my colleague Arlene Weintraub. The one thing I’ll add is that I saw Avila CEO Katrine Bosley along with VP of corporate development Nagesh Mahanthappa and CFO Andrew Hirsch a couple weeks ago at the JP Morgan Healthcare Conference in San Francisco. Bosley talked a bit about how the company’s lead drug candidate, a Btk inhibitor, was being readied for mid-stage clinical trials against cancer later this year, and that it was thought to have potential against autoimmune diseases.
It was a quick meeting, and there wasn’t any hint that a deal this big was ready to be announced. But Hirsch tried to persuade me that maybe the IPO market for biotech isn’t as barren as some people think, which I took as a subtle hint that Avila might be sniffing around at that option. “I think there is an appetite from the investment community for high-quality stories,” Hirsch said.
And Mahanthappa optimistically noted that some big companies have been doing creative deals to support innovative biotechs. In particular, he singled out Celgene for its partnerships with Cambridge, MA-based Agios Pharmaceuticals and Acceleron Pharma. When I asked him about predictions for the year ahead, he predicted that creative deals like that would continue.