6 months after arriving at Sanofi R&D, John Reed gambles $125M on Denali’s RIPK1 work
Sanofi’s new R&D chief, John Reed, is on the march.
Newly arrived from Roche, Reed is handing over $125 million in cash to partner with Denali $DNLI on a RIPK1 approach to tamping down inflammation. And in the deal — which includes more than a billion dollars in milestones — the French pharma giant is grabbing systemic inflammatory diseases while the Denali team continues to lead the charge on the blood-brain barrier and neuro diseases.
Denali dived into RIP1 a little more than 2 years ago, buying out Incro and bagging one of their top drugs — which initially came out of Harvard — for the pipeline. That approach to inflammation, provided they could get it into the brain properly, has potential in ALS, multiple sclerosis and Alzheimer’s. And it’s paying some quick dividends after a key player took careful notice of their work.
“John Reed was a champion of this deal,” Denali chief operating officer Alex Schuth tells me, citing some of the team players around Reed who helped close the deal.
Reed is committing his research group to the RIP1 targets outside the brain. Sanofi will take over the development work of DNL758 for targets such as rheumatoid arthritis and psoriasis while funding the Phase Ib/II costs for DNL747 for ALS, MS and other conditions — other than Alzheimer’s, where Denali retains responsibility for costs. Sanofi then will cover 70% of the costs in the pivotal neuro work.
The companies plan to share profits and losses in the US and China on 747, while Sanofi will pay royalties on 747 from the rest of the world and on all 758 sales. Sanofi also gets rights to preclinical RIPK1 inhibitor molecules.
This is one of the first new deals to be struck by John Reed since he made the leap to Sanofi 6 months ago, with Elias Zerhouni on the way out. A deeply respected scientist, Reed made little public progress while he was running the show at pRED based in Basel.
Sanofi, meanwhile, has earned a poor reputation for in-house innovation. But it has a great rep for collaborations, with a high-profile alliance with Regeneron that was recently downgraded at the giant pharma company.
Denali has managed to enjoy considerable credibility while walking a mine field of risk. The executive team out of Genentech has some of the best resumes in the field, and their targeted, genetics-based approach to CNS has won significant backing as they built the overall staff to 175, with a new HQ under construction right next to their current site in South San Francisco’s Oyster Point.
Steve Krognes, the CFO at Denali, is happy to talk about the staffing (growing), the new HQ (ready for move-in in March) and the money reserves (significant). Denali struck another major collaboration with Takeda at the beginning of this year for Alzheimer’s and near that delivered $155 million in cash and an equity stake.
But he and Schuth are also a little low key about some of the timetables and the exact chemical properties that make these drugs best-in-class contenders.
We can find out more about that as data are assembled.
They’re not alone in RIP1, by any means. Just a couple of weeks ago Hal Barron singled out a mid-stage program at GSK, which he characterized as a high-risk, high-reward drug that might need some work ahead of any pivotal test.
Image: John Reed.