The acquisition agreement wasn’t dead after all.
Celgene has officially brokered a deal to acquire a select range of Acetylon’s assets, seven months after the biotech giant stepped away and allowed its option agreement to lapse.
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No financial details were disclosed in the subsequent news release, which was distributed on Friday.
Founded in in 2008, Boston, Massachusetts-based Acetylon has nurtured a pipeline of selective histone deacetylase (HDAC) inhibitors. These are small molecules that interfere with a fundamental part of gene expression, the removal of an acetyl group from a histone. Targeted versions of these enzymes can interfere with gene and protein expression, potentially modifying the course of a wide range of diseases.
Celgene first expressed interest in the start-up in 2012, making a no-strings-attached investment. A year later things got serious. The company signed a deal worth up to $1.7 billion, with an upfront payment of $100 million, $1.1 billion in milestone payments, and a $500 million option to buy the company outright.
But in a 2016 filing with the SEC, Celgene reported that its option agreement had lapsed.
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In May 2016, our collaboration and option agreement with Acetylon expired. As a result, we do not have an exclusive right to acquire Acetylon or any right to receive any research and development services from Acetylon or have any obligation to pay any milestone payment under that agreement. We have retained our equity interest in Acetylon.
To most commentators the partnership seemed over.
In an email forwarded by a company representative, Acetylon president and CEO Walter Ogier said Celgene was hesitant to sign up for the full portfolio. Negotiations did continue, however, shaping the current deal.
“Celgene relinquished its exclusive option to acquire all of Acetylon earlier this year. This was an essential step in concluding the current transaction. We were not in a position to comment earlier,” Ogier said. “Celgene has now followed through with acquisition of Acetylon including those programs and assets (including citarinostat and ricolinostat) which best fit its strategic priorities.”
Friday’s news release details the complicated separation of Acetylon’s assets.
Celgene will gain exclusive rights to one of its two lead candidates citarinostat (ACY-241). It will share custody of the second, ricolinostat (ACY-1215), taking ownership of all programs and IP relating to oncology, neurodegeneration, and autoimmune diseases.
The remainder of Acetylon’s portfolio will be spun out to form a new company called Regenacy Pharmaceuticals. It too will establish a program to further ricolinostat, but only in non-cancer indications, including neuropathies. Regenacy will have full rights to another preclinical selective HDAC inhibitor, which is in development for indications that include sickle cell disease and beta-thalassemia.
Redistributing the pipeline across two companies doesn’t sound terribly efficient, but the deal seems to have hinged on the split.
“Celgene was only interested in certain Acetylon programs and assets which provide a strategic fit within Celgene’s portfolio,” Ogier said. “And Acetylon management and shareholders were interested in advancing the balance of Acetylon’s programs.”
It is not clear if and how Celgene and Regenacy will work together as they progress versions of the same pipeline. According to Ogier:
“There is no formal relationship yet established between Celgene and the new company Regenacy, other than a license by Celgene/Acetylon to Regenacy for ricolinostat for non-cancer indications.”
Regenacy will operate out of Acetylon’s former headquarters in Boston’s Seaport District, with many of the core executive team moving over. According to the news release “it will be owned by Acetylon shareholders (excluding Celgene) and will receive net working capital in Acetylon to fund Regenacy operations.”
Photo: Nataniil, Getty Images
