When Nimbus Therapeutics CEO Don Nicholson structured his $1.2 billion licensing deal with Gilead $GILD earlier this year, he built it with the Big Biotech’s rep for focus, science and clinical speed in mind.
It paid off. Fast.
Today, Cambridge, MA-based Nimbus is revealing that it grabbed a $200 million milestone from Gilead for its early-stage NASH drug, just 6 months after nabbing a $400 million upfront payment. The payout now gives them $600 million this year, half of that $1.2 billion deal total that Gilead signed off on.
“It’s a great drug for a company that really needs a pipeline,” Nicholson tells me about his new partners at Gilead. “Once they sink their teeth into something, they go after it hammer and tong.”
Nicholson says the payout is a direct benefit of his decision to overlook another offer for more money — no, he’s not saying which company was left at the deal table — to favor a partner that demonstrated with hep C that it will move heaven and earth to push rapidly through the clinic. What he also can’t say is exactly what the milestone payment is for, though it seems reasonable to assume on my end that it might have something to do with the quick ramp up for a mid-stage clinical program.
Working with a computational chemistry platform that has attracted the backing of Microsoft mogul Bill Gates, Nimbus built a program for a drug that targets an enzyme called Acetyl-CoA carboxylase, or ACC, involved in the creation of endogenous fatty acids and the regulation of beta-oxidation, described as the process by which fatty acids are broken down at a cellular level.
Tackling ACC, if it works as planned, should prevent the buildup of lipids in the liver and break down the ones already present, reducing the fibrosis that is characteristic of the fatty liver disease. For Gilead, it’s also a candidate for the kind of combination approaches that they favor in looking to command a market like NASH.
Now with $600 million in hand from the sale of a subsidiary, all hands on deck at Nimbus have switched to working on preclinical efforts, with lead efforts underway for Tyk2 and STING.
The Gilead deal came along at a perfect time, adds the CEO. In late 2015, Nimbus was working on an S-1. Then the IPO market chilled over — particularly for early-stage, high-risk biotechs. Now he has the cash to reward investors as well as employees while stockpiling enough cash to pay for years of runway.
Says Nicholson: “It gave us an awful lot of financial options.”
And the biotech can hang on to the S-1 for a better moment on the market.
In certain circles among the scribes that cover biotech, biobucks have a faint scent of the disreputable. The cash awards offered for development and commercial milestones can be written off as unattainable stacks of Monopoly money, often useful only in the realm of fantasy — Leprechaun gold found in the pot at the end of every rainbow.
But Nimbus Therapeutics offers us an example of how wrong that view can be.
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