12:00 AM
Mar 19, 2012
 |  BioCentury  |  Strategy

Incentivized success

Boston Biomedical: Quick path to takeout by Dainippon for cancer stem cell tech

Boston Biomedical Inc.'s story shows what can happen when researchers are given the imperative and the resources to invent as if their livelihoods depend on it. The company emerged from ArQule Inc. in 2006 and in six years has generated a Phase III-ready cancer stem cell program that fetched a $200 million acquisition offer from Dainippon Sumitomo Pharma Co. Ltd.

In addition to the upfront payment, Boston Biomedical shareholders could receive up to $540 million in development milestones and $1.9 billion in sales milestones if its two lead programs are successful.

Boston Biomedical got its start within ArQule when that company decided to shut down its discovery research operations to focus on development of tivantinib (ARQ 197), an internally discovered c-Met receptor tyrosine kinase inhibitor that was just moving into the clinic.

"I was told about a year ahead of time that the planned layoff was in the works," said Boston Biomedical CEO and CMO Chiang Li, who was CSO of ArQule at the time.

In an effort to keep his 28 discovery researchers employed while helping to ArQule to retain their service and avoid negative press and severance payments, Li worked out an agreement with the company.

As a result, Boston Biomedical was incorporated in November 2006 and received a $4.8 million service contract from ArQule the following January "to essentially act as a CRO and conduct preclinical studies related to tivantinib for several months," Li said.

In addition to completing its contractual obligations, Boston Biomedical was then free to conduct its own discovery research for roughly eight months with the hope of attracting investors to...

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