Onxeo said today it has agreed to acquire DNA Therapeutics for €1.7 million ($1.85 million) up front plus additional potential millions in milestone payments and royalties.

The deal will give Onxeo a first-in-class, signal-interfering DNA (siDNA) molecule— DNA Therapeutics’ lead product candidate, called Dbait or DT01—which according to the buyer has broken the cycle of tumor DNA repair while sparing healthy cells.

The siDNA molecule is a short, double-stranded DNA molecule designed to provide a false DNA break signal to attract DNA repair proteins, thus preventing the recruitment of repair enzymes to the site of actual DNA damage. Cancer cells continue dividing with the damaged DNA and die, because they lack the ability to stop division in the face of DNA damage.

Dbait/DT01 was invented by Marie Dutreix, Ph.D., at The French National Centre for Scientific Research, and Jian-Sheng Sun, Ph.D., of The French National Museum of Natural History (Muséum National d'Histoire Naturelle) in Paris, and further developed in Dr. Dutreix’s lab at the Institut Curie. DNA Therapeutics was formed as a spin-off of the Institut Curie and three other French academic institutions.

According to results of a first-in-human Phase I/IIa trial in patients with metastatic melanoma, Onxeo said, siDNA molecules showed good tolerance and safety when administered intratumorally and subcutaneously around the tumors.

Onxeo plans to begin development of Dbait/DT01 by assessing its safety and tolerance, both as a monotherapy and in combination with other DNA-damaging agents in various solid tumors. That will occur, Onxeo said, after it optimizes its manufacturing process, a process set to start once the deal closes.

“Based on preclinical findings, we plan to evaluate the product in orphan oncology indications where a systemic application is suitable and for which there is significant unmet need, for example triple-negative breast cancer and platinum-resistant ovarian cancer,” Onxeo CEO Judith Greciet said in a statement.

Onxeo agreed to acquire DNA Therapeutics for the upfront payment as well as €1 million (about $1.1 million) in cash or Onxeo shares upon successful initiation of a Phase II trial in a selected indication, plus royalty payments on future commercial sales—up to €25 million ($27.2 million) per indication developed and approved.

In addition, Onxeo said, a “large part” of DNA Therapeutics’ shareholders have agreed to invest €1 million ($1.1 million) cash in Onxeo shares.

The deal is subject to customary closing conditions and is expected to close by the end of March.

Onxeo added that even with Dbait/DT01 joining its pipeline the company remains committed to obtaining U.S. and European approvals for the orphan cancer treatment Validive® (clonidine lauriad).

However, the company added, it will only advance Validive to a Phase III trial with a partner, given the time and expense required to carry out the two Phase III trials requested by the FDA to consider approval for the drug candidate.

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