IFM Therapeutics' subsidiary model continues to pay off as the innate immune company scores its third high-value pharma deal in as many years. The biotech teamed up with Novartis Thursday in a collaboration and acquisition option agreement for its IFM Due subsidiary less than seven months after its launch.
Novartis AG (NYSE:NVS; SIX:NOVN) will finance IFM Due's R&D costs in exchange for an option to acquire the subsidiary for up to $840 million in upfront and milestone payments. Lina Gugucheva, VP of business development, operations & strategy at IFM Therapeutics LLC (Boston, Mass.), told BioCentury the fixed amount IFM Due receives for research expenses is undisclosed but comparable to a "very healthy VC round."
IFM Due is developing antagonists of cGAS and STING for inflammatory, autoimmune and neuroinflammatory diseases.
IFM Therapeutics LLC, which segments its different programs against innate immune targets into separate subsidiaries to facilitate dealmaking and financing, has a history of churning out quick exits for its units. The new deal could presage the third acquisition for the biotech and its predecessor, IFM Therapeutics Inc., and the second with Novartis.
IFM Therapeutics LLC CEO Gary Glick told BioCentury, "When we do these deals, the only thing that sits in subsidiaries is IP, and that makes M&A simple for us and our partners. We don't have to worry about people, facilities. It is really set up for extraordinarily efficient M&A."
In April, Novartis paid $310 million up front and up to $1.3 billion in milestones for IFM Tre, a separate IFM Therapeutics LLC subsidiary focused on inhibitors of the NLRP3 inflammasome for inflammation, fibrosis and neuroinflammation that launched less than a year before its acquisition (see "Novartis Buying IFM Inflammasome Unit").
Two years earlier, Bristol-Myers Squibb Co. (NYSE:BMS) acquired two-year-old IFM Therapeutics Inc. and two of its two preclinical immuno-oncology programs -- STING and NLRP3 agonists -- for $300 million up front and up to $1 billion in milestones. At the time, IFM Therapeutics Inc. spun its remaining assets into IFM Therapeutics LLC (see "BMS Expanding I-O Portfolio").
"We've really done three deals approaching $5 billion in deal value in three years, I think because we're picking targets very high on the pharma radar screen and we're moving forward very quickly to produce high quality molecules," said Glick.
The subject of the most recent deal, IFM Due, was launched in February to develop two preclinical programs that antagonize, rather than agonize, the STING pathway (see "IFM Launches Subsidiary for cGAS, STING Inhibitors").
The cGAS-STING pathway is an innate immune signaling pathway that senses fragments of abnormal DNA, such as microbial or damaged human DNA, and triggers inflammatory signaling. cGAS acts as a DNA sensor in the cytosol, which triggers STING to produce an inflammatory cascade. For inflammatory diseases, the idea is that blocking aberrant activation of the pathway should relieve inflammation.
Although agonists of STING have drawn the most attention for their potential in immuno-oncology, fewer companies are tackling STING antagonists for inflammatory diseases.
Last year, Aduro Biotech Inc. (NASDAQ:ADRO) exclusively licensed its STING inhibitor platform to Eli Lilly and Co. (NYSE:LLY); meanwhile, Nimbus Therapeutics LLC (Cambridge, Mass.) and Celgene Corp. (NASDAQ:CELG) are collaborating on STING antagonists.
Gugucheva told BioCentury the option deal for IFM Due has a fixed term with a possible extension, which is in line with the projected timeline to get into the clinic.
"With the research funding, we have the funds to drive IFM Due's drive to the clinic from early stage lead optimization," she said.
Clinical trials of the first STING antagonist are expected to begin in 2021.
Glick said IFM Therapeutics will continue its subsidiary model. The company plans to announce a new unit early next quarter to develop its non-NLRP3 inflammasome programs.
Targets: cGAS - cGAMP synthase; NLRP3 (NALP3; CIAS1) - NLR family pyrin domain containing 3; STING (TMEM173) - Transmembrane protein 173