Ramaswamy's Axovant whips up a CNS spinoff with a $530M deal and a syndicate of supporters
After beefing up its arsenal of gene therapies-in-development in December following the striking failures of its once-hyped dementia and Alzheimer’s assets, Vivek Ramaswamy’s Axovant has now shaped itself into a full-fledged gene therapy company by transitioning its small molecule team into a new CNS entity — Switzerland-based Arvelle Therapeutics.
Arvelle has paid South Korea’s SK Biopharmaceuticals $100 million upfront for the European rights to an antiepileptic drug, cenobamate, which is currently under FDA review. SK is eligible to receive up to $430 million in regulatory and commercial milestones, and royalties on net sales generated in Europe. Arvelle plans to file an application to market the drug in Europe based on the data generated from SK’s global clinical trial program.
While SK has the option to take a big stake in Arvelle, Axovant will receive a 5% preferred equity stake in the startup, following the consummation of a planned initial capital raise of more than $100 million from a global syndicate including NovaQuest Capital Management, LSP, BRV Capital Management, Andera Partners and H.I.G. BioHealth Partners, which is imminent.
Axovant will also lose 25% of its workforce — employees involved in small molecule development and commercialization are moving to Arvelle — including chief commercial officer Mark Altmeyer, who is stepping down to take charge as Arvelle CEO. Meanwhile, Axovant CFO Greg Weinhoff will remain at Axovant and transition to the role of chief financial and business officer at Arvelle later this year.
“We learned about cenobamate last year as we were defining the company’s new strategic direction, and we formed a unique relationship with SK Biopharmaceuticals through that process. The transition of Axovant’s small molecule team to Arvelle completes our transformation…while offering us an opportunity to reduce costs and realize long-term value from our legacy small molecule platform,” Axovant chief Pavan Cheruvu said in a statement.
Image: Vivek Ramaswamy at the US-China Biopharma Innovation & Investment Summit, 2018. ENDPOINTS NEWS, PHARMCUBE