Atlas Venture caps 'superb venture return' on Arteaus with $260M royalty sale
- Arteaus Therapeutics will sell its global royalty interest in Eli Lilly's migraine drug Emgality for $260 million, the company said Monday, finishing a largely successful, near-decade-long existence as a biotech company.
- Shortly after Atlas Venture and OrbiMed founded the biotech in 2011, Arteaus reached a deal with Lilly to gain ownership of an experimental antibody that would eventually become Emgality. Lilly bought back control of the drug in 2014, after Arteaus had established a proof-of-concept for anti-CGRP antibodies in migraine prevention.
- Now, Royalty Pharma has acquired the royalty rights to the migraine treatment that won U.S. and European approvals in the latter half of 2018. "Today's news of the final part of the value creation story is the capstone of a great investment," wrote Atlas Venture partner Bruce Booth in an April 1 post.
For Arteaus, the royalty sale is an endnote to the company's relatively brief history. The biotech stopped independently operating after Lilly bought back Emgality (galcanezumab) in 2014, and its executives scattered across the biotech universe as well.
In drug development, events rarely progress as smoothly and sequentially as in the case of Arteaus.
Atlas' Booth said that, based on public disclosures, the biotech reaped more than $300 million in payments across upfront, milestones and royalties. And it spent less than $18 million in equity capital to do so.
Lilly had structured the original deal with Arteaus to provide predefined rights to subsequently reacquire rights to the molecule that became Emgality. At the time, that "built-to-buy" structure was a relatively new concept and Arteaus became one of the earliest companies to complete such a deal when Lilly bought the drug back in January 2014.
In the roughly two-and-a-half-year span between, Arteaus advanced Emgality from first-in-human testing to a Phase 2 study. "By late 2013, Arteaus was the first company to establish the definitive [proof-of-concept] for anti-CGRP antibodies in migraine prevention, ahead of competitors like Amgen, Teva, and Alder," Booth wrote.
Booth said that Arteaus received all development and regulatory milestones from the Lilly deal. And now, the company has shed off its remaining royalty interest for $260 million.
Despite the biotech's speedy R&D work on Emgality, Lilly still got beat to market, winning U.S. approval several months after Amgen and Novartis' Aimovig (erenumab) and weeks after Teva's Ajovy (fremanezumab).
Lilly's pace of R&D has been a recent point of emphasis for company executives. Last December, Lilly shared data showing it has cut down the time from first-in-human testing to launch by about 20%.
The anti-CGRP market could further expand in 2019. While those three marketed therapies are designed to prevent migraines, Allergan and Biohaven Pharmaceuticals are trying to break into the acute treatment setting with their oral CGRP antagonists.
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