Afraxis said today it sold exclusive, worldwide rights to develop and commercialize compounds to Roche’s Genentech subsidiary, in a deal that could be worth up to $187.5 million.
The $187.5 million represents the sum of potential up-front, research, development, and commercialization milestone payments included in the deal. Full financial terms were not disclosed.
The compounds would be developed for an undisclosed novel target, Afraxis said in a statement. Afraxis discovers and develops drugs for diseases of the central nervous system including schizophrenia, Alzheimer's disease, Fragile X syndrome, and autism spectrum disorders. However, in 2011, Afraxis teamed up with NIH’s Therapeutics for Rare and Neglected Disease (TRND) program to advance the company’s work on a Fragile X compound.
Afraxis’ lead program is designed to inhibit p-21 activated kinase or PAK, a protein that regulates the development and activity of dendritic spines, in order to create new drugs designed to modify disease rather than simply treat symptoms.
In licensing the Afraxis compounds, Genentech aims to boost the CNS-drug portion of its pipeline. The biopharma giant has disclosed 14 compounds in clinical development on its pipeline web page, last updated October 16, 2012.
Three compounds are in Phase III. One is SST (arbaclofen or STX 209) for Fragile X syndrome, for which Roche will receive patent rights and can license commercial rights from developer Seaside Therapeutics under a June 2012 deal. No filing date has been set.
On its own, Roche expects to file for marketing approvals in 2014 for RG1678 (bitopertin) for two indications: schizophrenia with suboptimally controlled symptoms, and schizophrenia with persistent predominant negative symptoms. The following year, Roche envisions filing for approvals for RG1594 (ocrelizumab) for separate indications of primary progressive multiple sclerosis (MS) and relapsing MS.
SST is also in Phase II development for autism spectrum disorders, with no expected filing date set.
Founded in 2007, Afraxis has been fully funded by venture capital firm Avalon Partners, which appears to be in a position to recoup its investment in the company. While Avalon has never disclosed what it has invested in Afraxis, it is known the VC firm sunk an initial $6 million into Afraxis, followed by another $1.2 million toward a second round of $5.967 million, as disclosed in a Form D filed May 13, 2010, with the U.S. Securities and Exchange Commission.
"Afraxis has secured this relationship with Genentech only five years after founding the company as part of Avalon's life sciences portfolio," Jay Lichter, Ph.D., president and CEO of Afraxis, and managing partner of Avalon Ventures, said in a statement.
Earlier this month, another Avalon-backed biopharma startup, Zacharon Pharmaceuticals, was acquired by BioMarin Pharmaceutical for $10 million up-front, plus potential additional payments tied to undisclosed clinical, regulatory, and commercial milestones. Zacharon has created a drug development platform to enable new human therapeutics targeting glycans—the carbohydrate portions of glycoproteins, proteoglycans, and glycolipids—for diseases that include lysosomal storage diseases, oncology, inflammation, and others.
"Avalon's approach to investing in companies at the earliest stages and staying actively involved in company management is proving to be a successful strategy for life science investing," Dr. Lichter said.