Biopharmaceutical company Jazz Pharmaceuticals acquired Cavion, a US-based neurological disease drug developer backed by pharmaceutical firms Novartis and Eli Lilly, on Monday for up to $313m.
The company’s shareholders received $52.5m upfront and are in line for up to $250m more in the form of clinical, regulatory and commercial milestone payments. It is merging with an existing Jazz subsidiary.
Founded in 2006 as Tau Therepautics, Cavion is working on treatments for rare and chronic neurological diseases that are intended to modulate the T-type calcium channel, a kind of membrane protein that can be a factor in several kinds of diseases when operating incorrectly.
The company’s lead therapeutic candidate, CX-8998, is targeting a neurological disorder known as essential tremor which causes involuntary shaking in patients. It completed a phase 2 clinical study earlier this year that reportedly showed promise as a treatment for the condition.
Robert Iannone, Jazz’s executive vice president of research and development, said: “We are excited to continue the development of Cavion’s lead asset, CX-8998, a first-in-class small molecule, for the potential treatment of essential tremor, a prevalent and disabling movement disorder.
“The acquisition of Cavion demonstrates our commitment to further diversify our pipeline and product portfolio with the addition of CX-8998, which has the potential to provide a meaningful treatment option to patients.”
Corporate venturing units Novartis Venture Fund and Lilly Ventures co-led a $26.1m round for Cavion in early 2017 that included venture capital firm Enso Ventures and unnamed existing backers.
The company had raised $5m in convertible note financing from undisclosed investors in 2015, taking its overall funding at the time to $18m, in addition to $15m in non-dilutive resources.
Fortis Advisors represented Cavion’s shareholders in the transaction. Cavion retained MTS Health Partners as financial adviser, Pilot Health Advisors as strategic adviser and Cooley as legal adviser, while Hogan Lovells provided legal advice for Jazz Pharmaceuticals.
