Novartis will acquire pain drug developer Spinifex Pharmaceuticals for $200 million cash upfront plus undisclosed clinical development and regulatory milestone payments, the companies said today.

The deal will expand Novartis’ neuroscience drug portfolio with Spinifex's Phase IIb-ready lead candidate EMA401, a potential first-in-class oral treatment for chronic pain, particularly neuropathic pain, without central nervous system (CNS) side effects.

Neuroscience is among Novartis’ key therapeutic areas of focus. In 2013, the company’s Novartis Institutes for Biomedical Research resurrected its research effort in the specialty, naming Ricardo Dolmetsch, Ph.D., former senior director of molecular networks at the Allen Institute for Brain Research, as its global head of neuroscience.

In the case of EMA401, Novartis reasons that peripheral targets, such as an AT2R antagonist, offer a promising approach to neuropathic pain treatment because they act outside the blood-brain barrier, and thus are expected to avoid common side effects in the CNS, such as dizziness or confusion.

EMA401 has shown positive Phase II results in a trial assessing the compound in post-herpetic neuralgia (PHN), with no CNS side effects or any serious adverse events observed. Results from that trial have been published in The Lancet..

Novartis said it will continue the development of EMA401. The pharma giant said it  plans to begin Phase IIb clinical trials in patients with PHN or painful diabetic neuropathy (PDN), and intends to build on these two indications by pursuing a broad peripheral neuropathic pain (PNP) label for EMA401.

The acquisition deal is expected to close in the second half of this year, subject to clearance under the Hart-Scott-Rodino Act and customary closing conditions.

EMA401 is an angiotensin II type 2 receptor (AT2R) antagonist that was developed from research carried out by two researchers at Australia’s University of Queensland. Professor Maree Smith, Ph.D., director of the Centre for Integrated Preclinical Drug Development; and Bruce Wyse, Ph.D., business development manager at University of Queensland Diamantina Institute, identified AT2R antagonists as inhibitors of neuropathic pain in preclinical models.

In 2005, the technology was spun out of the university into Spinifex Pharmaceuticals via a Series A investment round of A$3.25 million ($2.5 million) from UniSeed, UniQuest and GBS Venture Partners. Three years later, the Australian venture syndicate reinvested and added Brandon Capital Partners for a Series B financing totaling A$23.05 million ($17.6 million).

Last year Spinifex raised a $45 million Series C round to fund the company’s further clinical development and relocate substantial operations to the U.S. The company established its U.S. base in Stamford, CT, with CEO Tom McCarthy building an expanded clinical development and corporate team. Existing investors continued to participate along with two U.S.-based VC firms, Novo Ventures and Canaan Partners.

“The success of Spinifex and the tremendous potential for EMA401 to help patients suffering from neuropathic pain is a significant example of how an international venture capital syndicate, partnering with Australian based investors, can bring university technology closer to commercialization,” Spinifex Chairman Heath Lukatch said in a statement. “We have tremendous respect for Novartis' clinical development and commercial expertise, their passion for neuroscience and their commitment to helping patients who are suffering from neuropathic pain.”

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