Acetylon Pharmaceuticals, a US-based healthcare company which is developing histone deacetylase (HDAC) inhibitors for the enhancement of therapeutic outcomes in cancer and other critical human diseases, has entered into a strategic collaboration and option agreement with biopharmaceutical company Celgene Corporation, an existing investor.
The agreement will support the development of Acetylon’s portfolio of HDAC inhibitors. Acetylon is receiving a $100m upfront, non-dilutive cash payment. The agreement includes an exclusive option for the future acquisition of Acetylon by Celgene; if Celgene exercises its option to acquire Acetylon, an upfront payment determined from a valuation process and subject to a minimum of $500m will be paid at the time of closing.
Acetylon shareholders will be eligible to receive potential future milestone payments for either approvals or additional indications of drugs developed by Acetylon and for accomplishing defined sales targets. If all the milestones are achieved, the additional value accruing to Acetylon shareholders would be $1.1bn, comprised of $250m for regulatory milestones and $850m for sales milestones.
Previously, in February 2012, Celgene made a $15m strategic equity investment in Acetylon, which took Acetylon’s funding to $51.5m. Acetylon closed its $27m series B round in June 2011, while its series A round raised $9.25m over two separate tranches. Acetylon’s private equity investors are thought to include investment company The Kraft Group.
Mark Alles, Celgene’s executive vice president, global head of hematology and oncology and observer to the Acetylon board of directors, said: “The expansion of our relationship with Acetylon from our original equity investment to this exciting strategic collaboration demonstrates our belief that Acetylon‘s highly selective HDAC inhibitors have the potential to meaningfully improve clinical outcomes for patients with a variety of diseases, including hematology, oncology, diseases of the immune system, and neurodegenerative diseases.”
Walter Ogier, president, chief executive officer and co-founder of Acetylon, said: “We are excited to be able to work with Celgene under the expanded framework of this new development and option agreement. The $100 million in up-front, non-dilutive funding should enable us to aggressively advance our drug pipeline and create substantial value for our patients and investors.”