In biotech, there are quick flips, and there is what Flexus Biosciences managed to accomplish today. Just over a year after emerging from stealth, the San Carlos, CA-based startup has been acquired by Bristol-Myers Squibb in a deal worth up to $1.25 billion.
New York’s Bristol-Myers (NYSE: BMY) is paying $800 million up front to snap up Flexus, which is developing a group of small-molecule drugs meant to treat cancer by affecting the function of the immune system. Another $450 million could flow to the startup’s investors on the back end if in various milestones are hit. The boards of both companies have approved the deal, which should close in the first quarter.
The deal gives Bristol full rights a preclinical small molecule drug Flexus is developing called F001287. The drug blocks what’s known as IDO-1, an enzyme produced by some tumor cells that helps them evade the immune system. Later this year, Bristol will seek FDA clearance to begin its first trial of the drug.
Bristol also grabs a hold of preclinical discovery programs Flexus has been doing into other immune-modulating drugs.
It’s a quick exit for Flexus’s backers, who put about $38 million into the company since its inception in 2013, including a $25 million Series B two months ago. Those backers include Celgene (NASDAQ: CELG), the big cancer drugmaker from Summit, NJ; Kleiner Perkins Caulfield & Byers; and The Column Group.
What’s more, Flexus isn’t done here. Bristol is leaving some other cancer drug prospects on the table—including an immunotherapy drug called FLX925 that’s in Phase 1 trials—that Flexus will spin out into a new company.
Flexus is run by Terry Rosen. Both he and R&D chief Juan Jaen were Tularik executives who joined Amgen (NASDAQ: AMGN) after Tularik was sold to the Thousand Oaks, CA-based drugmaker for $1.3 billion in 2004. The pair will head the new Flexus spinout, along with the rest of the startup’s existing management team.
“With the consummation of this acquisition, we will continue to advance our oncology and immuno-oncology pipeline of Agents for Reversal of Tumor Immunosuppression (ARTIS) in the newly created spin-off, with the strong support of our committed group of investors,” Rosen said in a statement.
It’s the second immuno-oncology related Bristol announced this morning, meanwhile. The drugmaker also cut a deal with South San Francisco, CA-based Rigel Pharmaceuticals (NASDAQ: RIGL) potentially worth $339 million to co-develop drugs that inhibit TGF beta receptor kinases, another target that suppresses the immune system in cancer. Bristol, like its oncology rivals, is snapping up a variety of assets to pair with its cancer immunotherapy drugs—like so-called “checkpoint” inhibitors—to boost their effectiveness. It’s a mix and match game that’s spurred on a lot of acquisitions, partnerships, and agreements on combination therapy trials.