Swiss drug giant Roche has paid €380 million upfront for a four-year-old Irish biotech company working on treatments to meet clinically unmet needs in a wide range of debilitating inflammatory diseases.
These range from Alzheimer’s and Parkinson’s to cardiovascular disease, kidney disease, inflammatory bowel disease, asthma, arthritis and multiple sclerosis.
Milestone payments related to the drugs hitting certain targets could raise that price by a multiple.
Inflazome was founded in 2016 by chief executive Dr Matt Cooper and Trinity immunologist Prof Luke O'Neill. It emerged from research into therapies that block inflammation.
The upfront payment marks a sevenfold return for venture capital investors who have pumped €55 million into the business. These include Ireland's Fountain Healthcare Partners, as well as Forbion, Longitude Capital and Novartis Venture Fund.
For the company’s small staff, including its founders, the rewards for its success to date are greater. Dr Cooper, Prof O’Neill and other key staff have been exercising options in the business, mostly about 20 cent a share. At the €380 million headline price, those shares are now worth about 50 times more at about €10.
The Roche deal includes potential additional milestone payments if the Irish company’s drugs meet certain targets. There is no information on the scale of those potential payments, but a deal last year for a company pursuing the same medical target featured milestone payments four times the headline sale price.
On that basis, Inflazome could yet be worth close to €2 billion if everything works out for it in the notoriously tricky pharma business.
The deal gives Roche total control of the Irish business and its research. Inflazome currently has two drugs in clinical trials: Inzomelid, for neurodegenerative diseases in the brain; and Somalix, for inflammatory diseases in the rest of the body.
Inflazome is focused on blocking a key danger sensor – NLRP3 – in immune cells, called inflammasomes, which, if overactive, is implicated in a wide range of chronic inflammatory conditions. Its drugs are designed to inhibit the function of this NLRP3.
Speaking recently, Dr Cooper said: “Neurodegenerative diseases such as Parkinson’s, Alzheimer’s and depression are sadly all expanding now with an ageing population.
“There are no curative therapies available so a disease-modifying drug would be transformational for millions of people.”
On the Roche deal, Dr Cooper noted the Swiss group’s commitment to addressing a wide range of medical conditions and said: “We are delighted to close this deal with Roche. With Inflazome now part of the Roche organisation, Inflazome’s pioneering molecules are well positioned to be developed quickly and effectively so they can help patients suffering from debilitating diseases.”
Chairman Manus Rogan, who was a founding investor in his role as a managing partner at Irish life sciences VC group Fountain Healthcare, praised the work of Dr Cooper and his small team.
“It’s been quite the journey over the past four years. This is a fantastic outcome for everyone involved, especially Matt and his team.
He noted that the Inflazome portfolio was made up of small-molecule drugs “which by their nature are lower cost when compared with more expensive biologic-based drugs. This will help enable much broader use for more patients and diseases.” The drugs are designed to be given orally rather than intravenously or by injection, making them easier to distribute and administer, if successful.
Both drugs have successfully concluded Phase I clinical trials and are preparing for Phase II trials at present.
Inzomelid was granted orphan drug designation in July. The designation makes it easier for medicines to gain approval to get to market and also extends their patent life. It is granted only to drugs treating such a small patient population that they will never make a profit without government support.