Aires Pharmaceuticals, a US-based developer of a lung treatment, has raised $20m in its series B round and signed an option for Switzerland-based Novartis to acquire the company for up to $250m.
Venture capital firm MPM Capital led the round as a new investor through its MPM Bio IV NVS Strategic Fund and was joined by VC peer ProQuest Investments. The Strategic Fund is a joint venture between MPM and Novartis’s pharmaceutical business unit set up in 2007 to invest and take options on acquiring drugs.
The first deal out of the fund was Novartis’ untaken option to license a bone disease drug by Radius in 2007.
For Aires, Novartis has paid an undisclosed amount for an exclusive option to acquire the start-up comapny following the successful completion of a phase two clinical study of Aironite to treat pulmonary arterial hypertension.
Including the initial acquisition payment plus potential additional regulatory and sales milestone payments, the deal with Novartis could reach $250m.
Founded in San Diego in December 2006 with seed funding by ProQuest, Aires has exclusive licenses to technology from the US National Institutes of Health and the University of Cincinnati.
William Greene, managing director of MPM Capital, will join Aires’s board.