Italian pharma Zambon said today it has acquired Breath Therapeutics and its subsidiaries for up to €500 million (about $559 million), in a deal that adds a Phase III program to the buyer’s severe respiratory disease pipeline.

Founded in 2016, Breath has operations in Munich and Menlo Park, CA, and has focused on developing L‑CsA‑i, a novel proprietary liposomal formulation of Cyclosporine A indicated for bronchiolitis obliterans syndrome (BOS), for which there are no approved therapies.

L-CsA-I is designed for inhalation with the drug-specific, investigational customized nebulizer eFlow® developed by PARI Pharma. The drug has received the orphan drug designations of the FDA and European Medicines Agency.

L-CsA-I is under study in two Phase III trials launched during the first quarter of this year: BOSTON-1 (NCT03657342), designed to assess the candidate in adults diagnosed with BOS following single lung transplant; and BOSTON-2 (NCT03656926), designed to evaluate L-CsA-I in adults diagnosed with BOS following double lung transplant. In both trials, patients will receive either 10 mg of L-CsA via PARI eFlow twice daily plus standard of care (SoC), or SoC alone, for 48 weeks.

Primary completion dates for the trials are September 2021 for BOSTON-2, and December 2021 for BOSTON-1. Zambon expects L-CsA-I will be ready for commercialization by 2023, subject to regulatory approvals.

Breath launched the Phase III trials, established full commercial-scale production for the drug/device combination, and initiated commercial activities to prepare for and support the future product launch, using proceeds from the $46 million Series A financing closed in 2017. Gimv and Sofinnova Partners co-led the round, joined by Gilde Healthcare.

Zambon agreed to shell out at least €140 million ($156.5million) for Breath and subsidiaries—a price that rises to €500 million (about $559 million) if L-CsA-I achieves regulatory and sales milestones.

Buyer’s largest-ever deal

“This important deal, the largest in our history, reinforces Zambon’s commitment to serve severe respiratory diseases, enhancing and broadening our offering to the healthcare system, and complements our late-stage pipeline,” Zambon CEO Roberto Tascione said in a statement. “As we want to identify, develop, and offer innovative solutions for the treatment of severe life-altering diseases, this acquisition marks the start of a new phase for Zambon, not only for the great pipeline we’re acquiring but also for the scientific knowledge that the Breath Therapeutics team brings into our company.”

Founded in 1906, Milan-based Zambon specializes in developing treatments for respiratory illnesses, rare diseases and specialties, and women’s health (simple infections of the urinary tract). The company employs 2,654 people worldwide, according to its website, and generated €702 million (about $785 million) in revenue last year, with 20 subsidiaries in three continents—Europe, North America, and Asia—and owns manufacturing units in Italy, Switzerland, China, and Brazil.

L-CsA-I joins Zambon’s severe respiratory disease pipeline, enabling the company to offer treatments for two rare respiratory conditions; the other is noncystic fibrosis bronchiectasis (NCFBE).

In NCFBE, Zambon is developing colistimethate sodium powder for nebulizer solution via inhalation, which in December 2018 received the FDA’s qualified infectious disease product (QIDP) and Fast Track designations for the prevention of pulmonary exacerbations in adult patients with NCFBE colonized with Pseudomonas aeruginosa.

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