BMS to Acquire Padlock Therapeutics for Up to $600M

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Bristol-Myers Squibb (BMS) said today it will acquire Padlock Therapeutics for up to $600 million in a deal that expands the buyer’s pipeline in autoimmune diseases, including rheumatoid arthritis.

The deal will give BMS full rights to Padlock’s Protein/Peptidyl Arginine Deiminase (PAD) inhibitor discovery program, aimed at developing new treatment approaches for patients with rheumatoid arthritis.

“We’re poised to enter formal preclinical development on our lead program and anticipate generating clinical data on the approach in the next couple years, with a portfolio of other PAD programs advancing behind it,” Padlock’s chairman Bruce Booth, D.Phil., said today in a post on his blog LifeSciVC.

Dr. Booth is a partner at Atlas Venture, which led a $23 million Series A financing for the company announced in December 2014, about a year after the company was incubated through Atlas’ seed program.

“Padlock’s scientific approach could be summarized in two short sentences: Autoimmune disease is caused by autoantigens, and blocking the creation of those autoantigens will ameliorate the pathology,” Dr. Booth added.

Rheumatoid arthritis is one of three areas of therapeutic focus identified by Padlock; the other two are systemic lupus erythematosus (SLE) and multiple sclerosis.

Padlock and BMS reason that inhibiting PADs may prevent progression of autoimmune diseases early in their development. Specifically, PAD4 inhibition in combination with current standard of care therapies may increase and maintain remission rates in rheumatoid arthritis patients with rapidly progressive disease.

Immunoscience is one of BMS’ eight core therapeutic areas, along with cardiovascular, fibrotic diseases, genetically defined diseases, immune-oncology, metabolics, oncology, and virology.

BMS’ largest-selling marketed immunoscience drug, Orencia (abatacept), generated $1.885 billion in worldwide revenues last year, up 14% from $1.652 billion in 2014. Orencia is indicated for adult rheumatoid arthritis and juvenile idiopathic arthritis.

BMS agreed to spend up to $225 million in upfront and near-term milestones, as well as up to $375 million in additional payments tied to development and regulatory milestones.

“We are confident that Bristol-Myers Squibb can leverage the scientific foundation built by Padlock's founders, team, and advisors to help patients with serious autoimmune diseases,” added Michael Gilman, Ph.D., Padlock’s founder and CEO.

Dr. Gilman and Atlas Venture co-founded privately-held Padlock in January 2014 along with Paul Thompson, Ph.D., and Kerri Mowen, Ph.D., whose research at The Scripps Research Institute on PAD enzymes was licensed by the company and forms the basis of its science. Dr. Thompson is now at University of Masachusetts.

In his blog, Dr. Booth said Atlas syndicated the initial tranche of the Series A financing with Johnson & Johnson Development Corp. (now Johnson & Johnson Innovation) and Merck Serono Ventures, and later added Index Ventures. Last year, Padlock licensed some PAD-related patents as well as intellectual property and assets from GlaxoSmithKline, in exchange for an undisclosed equity grant and board observer rights—but not option to license or acquire Padlock assets.

Dr. Booth said Padlock had considered other options in recent months—including a Series B financing followed by an IPO, pursuing partnerships on some PAD applications, and option-to-acquire deals—before agreeing to the deal with BMS.

The transaction has been approved by the boards of both companies and by Padlock stockholders. BMS and Padlock said they anticipate the deal will close during the second quarter of this year.








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