Four months ago, Atlas Venture partner Saurabh Saha set up shop at the newborn Delinia with a preclinical autoimmune drug, $35 million in startup cash and a skeleton crew. Today, Celgene says it struck a deal to buy the startup for $300 million up front and up to $475 million in milestones, adding a new drug for its autoimmune and inflammation pipeline.
Celgene is getting a preclinical lead program in the deal, which centers primarily on DEL106, as well as related second generation programs. DEL106 is an IL-2 mutein Fc fusion protein designed to upregulate regulatory T cells (Tregs), immune cells that are critical to maintaining natural self-tolerance — and avoiding autoimmune diseases.
There’s a long list of diseases triggered when the balance of Tregs and T effector cells is disrupted and the immune system starts to attack healthy tissue. By expanding Tregs, amping up activity, Saha set out believing that Delinia’s drug can restore immune tolerance and homeostasis, stopping diseases like lupus, Type 1 diseases and fibrotic diseases like scleroderma.
The deal clearly comes with a big cash payout to Atlas — which has never been reluctant to take a good multiple for early-stage assets like this — as well as Sofinnova Partners, the Paris-based VC group that co-led the round. And there’s also plenty of upside left if the tech works as hoped. For Celgene, it’s yet another acquisition for a deal team that has been striking a broad range of pacts over the years.
In a blog post this morning, Atlas’ Bruce Booth wrote:
Over the past decade, Celgene has built an impressive I&I portfolio of both internally-discovered and externally-sourced programs. Otezla (apremilast) is their flagship I&I medicine today (fastest psoriasis drug to hit $1B in sales from launch) and was discovered at Celgene; behind it are several additional homegrown programs earlier in development (e.g., immunomodulator CC-220 and anti-fibrotic CC-90001). Celgene’s I&I pipeline also has several high profile externally-sourced therapies, including mongersen/GED-0301 (via a license with Nogra Pharma) and ozanimod (via acquisition of Receptos). They’ve also been at the forefront of changing the autoimmune treatment paradigm, such as with the recent deal with Anokion on tolerance induction. The Delinia programs fit nicely into this growing portfolio, and complement several of these I&I approaches – which was a big driver for Celgene’s overall interest in the story.
Delinia execs Saha and Jeff Tong, chairman, told me in a follow-up interview that the early buyout came up as they began to strike up introductory contacts aimed at establishing some longterm talks with key players in the field. Their story of a new technology that could have a profound impact on autoimmune diseases — even though it was still preclinical — attracted keen attention from several players, including an unexpected inbound call from one company that helped get the bidding going for far more than what Atlas had invested in seed and early A cash.
“It was not a formal auction,” Tong tells me, “but there was a very competitive level of interest.”
Not yet decided is what happens with the Delinia team. Saha says those discussions are continuing with Celgene.
Co-founder and the new chief scientific officer at Delinia, Jeffrey Greve, is credited with much of the discovery work for their cytokine. Company co-founder Michael Rosenblum is the assistant professor of dermatology at the UCSF School of Medicine.
“Delinia is at the forefront of advancing new approaches to treating patients with severe and debilitating autoimmune diseases,” said Rupert Vessey, FRCP DPhil, President of Research and Early Development for Celgene Corporation. “We look forward to progressing DEL106 into the clinic next year.”
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