From partner to knight in shining armor: Castle Creek to buy Fibrocell
In April, Castle Creek swooped in to partner with the embattled gene and cell therapy Fibrocell to shepherd its lead gene therapy for a type of “butterfly” disease into late-stage development. Now, the New Jersey-based dermatology company is acquiring its partner in a deal worth $63.3 million.
Pennsylvania-based Fibrocell last year initiated a review of strategic alternatives, including a sale.
Its lead drug FCX-007 is engineered to treat the underlying cause of recessive dystrophic epidermolysis bullosa, which is caused by the deficiency of the protein COL7. Cells are extracted from the patient, genetically modified, and then used to treat wounds by local injection, avoiding systemic distribution.
A late-stage study for FCX-007 was kicked off in July, and if all goes well, a marketing application for the treatment is expected to be submitted in 2021, Fibrocell said on Thursday. The company, which also counts Intrexon $XON as a partner, has an experimental gene therapy FCX-013 in early-stage development for moderate to severe localized scleroderma.
Epidermolysis Bullosa (EB) is a group of genetic skin conditions that cause the skin to blister and tear due to minimal contact — infants born with the disease are called ‘butterfly children’ as their skin is considered as fragile as a wing of a butterfly.
Castle Creek Pharmaceuticals — one of former Marathon chief Jeff Aronin’s portfolio companies under his flagship investment engine Paragon Biosciences — has its own EB drug in development: CCP-020 is a late-stage topical ointment under development for use in epidermolysis bullosa simplex. The drug is a repurposed an oral orphan treatment called diacerein, which is approved to treat joint swelling or pain in the EU, but its use is restricted due to the risks of diarrhea and liver problems.
“Following our licensing agreement to develop and commercialize FCX-007, our experience working together on rare dermatological conditions caused us to quickly realize that Castle Creek and Fibrocell could achieve even greater synergies by combining the companies into one,” said Greg Wujek, CEO of Castle Creek Pharmaceuticals, in a statement.
Castle Creek has agreed to pay $3 per Fibrocell share $FCSC, which is a nearly 64% premium to the company’s Thursday closing. The deal, in which Castle Creek will absorb Fibrocell’s debt, is expected to close by the fourth quarter.