A startup developing the once-discarded fedratinib, a drug cast off from Sanofi due to safety concerns back in 2013, is now the subject of a $7 billion acquisition deal by Celgene.
The tiny San Diego company at the center of the deal is Impact Biomedicines, founded by John Hood, the ex-co-founder and CSO of regenerative medicines company Samumed. Before his stint at Samumed, Hood had been the co-inventor of fedratinib while research chief at TargeGen. Then Sanofi scooped up the mid-stage JAK2 myelofibrosis drug with big plans to make it the centerpiece of their newly revived oncology effort and Hood went on to Samumed.
Fedratinib was a flop for Sanofi. Patients began to develop a dangerous neurological condition tied to vitamin B deficiency called Wernicke’s encephalopathy. As a result, the FDA put a clinical hold on it in 2013 and the pharma giant ultimately shelved the effort and later gutted its cancer group.
Last fall, Hood got the experimental drug back, with the hold lifted. To start, he raised $22 million from Medicxi to build the company. Taking the data from a pivotal trial, he planned to convince regulators that patients can be protected from the lethal side effect. He recently added a $90 million round to help with market launch.
The first stage includes a $1.1 billion upfront payment, with $1.25 billion tied to regulatory approvals on myelofibrosis and much of the rest for successful commercialization. The maximum amount payable for regulatory approval milestones is $1.4 billion for myelofibrosis and other indications. Starting from global annual net sales of $1.0 billion, aggregate tiered sales-based milestone payments could total $4.5 billion if global annual net sales exceed $5 billion.
Hood was shooting for a quick turnaround at the FDA, looking to leverage the existing pivotal data with new safety info to set up a quick approval. Celgene will now be hustling ahead with that plan in place, leaving Sanofi with nothing but a stake in Hood’s company to compensate it.
“Myelofibrosis is a disease with high unmet medical need as the number of patients who are ineligible for or become resistant to existing therapy continues to increase,” said Nadim Ahmed, president of hematology and oncology at Celgene, in a statement. “We believe fedratinib is uniquely positioned as a potential treatment for myelofibrosis and it provides strategic options for us to build leadership in this disease with luspatercept and other pipeline assets.”
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