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Jan 20, 2014
 |  BioCentury  |  Finance

Asset-centric milestone

Lilly-Arteaus deal provides Atlas Venture with first asset-centric graduation

Atlas Venture and Eli Lilly and Co. both checked first-time milestones when the pharma decided to reacquire its anti-CGRP antibody for migraine prevention from Arteaus Therapeutics LLC.

Last week, Lilly exercised its option to reacquire LY2951742 from Arteaus after the compound met the primary and secondary endpoints in a Phase II trial to prevent frequent recurrent migraines. The pharma said it plans to start a Phase IIb trial this year.

Arteaus - the first company launched through Atlas Venture Development Corp. (AVDC) - now is the first graduate from Atlas Venture's build-to-buy single-asset unit after about two and a half years.

The VC launched AVDC in July 2010 to develop clinical candidates and then sell or partner them without the traditional trappings that go with company formation (see BioCentury, Feb. 28, 2011).

"The model allows pharmas an opportunity to get access to external project financing, get feedback on what the open capital market is willing to fund, and get access to leadership from outside their own organizations while retaining the right to re-internalize the asset in the future," said Atlas' Jean-Francois Formela.

He added: "Our approach provides pharmas with a vehicle to externalize risk and capital intensity, while allowing them the flexibility to opt in and only pay for successful externalization efforts."

For Lilly, it's the first compound reacquired under the pharma's Capital Funds Portfolio (previously called the Mirror Fund), which the company launched in 2011 to externalize R&D.

Under that program, Lilly out-licenses early stage compounds to VC-backed companies to be developed through clinical POC, after which the compounds or rights are put up...

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