- Alkermes will pay $100 million to buy privately held Rodin Therapeutics, a biotech focused on central nervous system disorders resulting from defective nerve cell junctions.
- The deal lines up an additional $850 million in potential payouts based on development, regulatory and sales goals if Rodin's experimental drug candidates advance that far.
- So far, Rodin has advanced one experimental drug into clinical trials. RDN-929, a neurological disease drug, has completed one safety trial in healthy men and is now in a placebo-controlled study in healthy men and women. However, Alkermes says it will focus on Rodin's preclinical candidates, "potentially prioritizing those ahead of future clinical development of Rodin's initial clinical candidate."
Drug developers have struggled to come up with more effective treatments for neurodegenerative conditions like Alzheimer's, Parkinson's and Huntington's disease. Rodin has developed a new approach, improving "synaptic resilience" to the disease processes.
The mechanism of action is histone deacetylases, or HDACs, a class of drug that has been approved for hematological cancers in the form of Farydak (panobinostat) and Beleodaq (belinostat). However, in the past HDACs have been associated with cardiovascular side effects, including irregular heartbeat and atrial fibrillation, which makes them unlikely candidates for use to treat chronic diseases.
Rodin says it has developed approaches that inhibit only HDAC complexes that can help improve synaptic function, thereby limiting side effects. The company has advanced its experimental candidate into a Phase 1 safety study backed by only a single disclosed $27 million funding round backed by Atlas Venture, GV, Hatteras Venture Partners, Remeditex Ventures, and Third Point Ventures in 2017.
It also received $1.2 million in grants from the Michael J. Fox Foundation for Parkinson's Research in 2017 and a $17.3 million combined equity investment from Atlas and Biogen in 2016 as part of a clinical collaboration.
Alkermes said Rodin's ability to inhibit a biological pathway called the HDAC-CoREST complex in preclinical testing "resulted in increased spine density and synaptic proteins, and improved long-term potentiation at doses that may allow for chronic treatment."
The $100 million payment comes out of Alkermes cash reserves, which were $261 million as of Sept. 30. The company expects the acquisition to add about $20 million to its research & development expenses in 2020. R&D spending so far in 2019 has totaled $314 million.
The transaction comes less than a month after Alkermes announced a restructuring that will result in layoffs for 160 of its 2,300 employees and incur between $13 million and $15 million in termination costs in the fourth quarter of 2019. That restructuring intends to save $150 million a year.
Clinically, Alkermes has had a mixed year. It was buoyed by approval of Biogen-partnered Vumerity (diroximel fumarate) for multiple sclerosis, an event that resulted in a $150 million milestone payment. But Alkermes was stung by the Food and Drug Administration's rejection of antidepressant ALKS 5461, although it expects to submit schizophermia and bipolar disorder treatment ALKS 3831 to the FDA this year.
With that submission, Alkermes' pipeline has shrunk to just one candidate, an immuno-oncology agent called ALKS 4230, so new entries from the Rodin acquisition will help expand its R&D work.