In just three years, Gary Glick and his team at IFM Therapeutics have parlayed their research into three deals with blue-chip pharmaceutical companies, earning in upfront money more than 10 times what investors put into the Boston-based biotech.
The dealmaking is early validation of both IFM's drug development chops as well as a corporate structure that houses promising programs in separate subsidiaries, allowing for each to be partnered off individually.
It's an organizational approach that's gained some favor across biotech. It's also the last thing Glick had in mind when forming IFM in October 2015.
"I had no idea what a subsidiary model was when I joined the company," said Glick, CEO and co-founder of IFM, in an interview with BioPharma Dive.
That changed after Bristol-Myers Squibb bought IFM Therapeutics in a 2017 deal which led IFM's backers to spin out a new corporate entity under the same name.
"In the very near-term wake of the Bristol-Myers transaction, IFM had an existential moment of saying what are we really good at? Do we want to grow into a 150-person operation and try to go public? Or do we want to try to continue to solve tough chemistry problems?" said IFM's head of business development Lina Gugucheva, who joined in the months following the Bristol-Myers acquisition.
"What we came up with is a model whereby we don't have to make that decision until we have an asset in hand."
IFM's now proved its methods twice more, inking deals with Novartis first in April and then again this week.
In the first, Novartis bought the biotech's Tre subsidiary for $310 million upfront and up to $1.265 billion in contingent payments. Thursday's arrangement gives the Swiss pharma an option to buy another unit, dubbed Due, for as much as $840 million. Until that decision, Novartis will fund Due's research into small molecule drugs targeting abnormal inflammatory responses by the body's innate immune system.
"We continue to be encouraged by the scientific rationale for leveraging the innate immune system to treat underlying causes of disease," said Prakash Raman, head of business development at the Novartis Institutes for BioMedical Research, in an emailed statement.
One deal didn't lead to the other, however.
"We're delighted that they turned out to be the partner of choice once again for IFM, but we didn't start off that way and it wasn't in any way tied to the first deal," Glick said.
Initially, IFM planned to seek venture backing for Due, which it launched in February with two preclinical programs. But, after being approached by several pharmaceutical companies, Glick and his team decided a large company's backing could serve in lieu of a financing round.
Between Bristol-Myers and Novartis, IFM has secured $610 million in upfront cash and more than $4 billion in milestone payments that could be realized down the road. That makes for a significant return for IFM's backers, which have invested less than $60 million across two Series A funding rounds. (Atlas Venture supported IFM during its seed stage.)
IFM's decision to house its research in separate subsidiaries has been an important part of its success.
"Often after M&A, when the company gets bought, the team that did it gets scattered to the wind," said H. Martin Seidel, head of R&D at IFM, in an interview.
"This model gives us the flexibility that if we do end up being successful and generating a program that is ripe for M&A, we can keep the band together," he added, terming it a "lather, rinse, repeat" approach.
As a result, IFM's continued to follow the same thread of research which initially drew Bristol-Myers' eye in 2017.
Then, Glick's team was working on boosting the body's innate immune response to cancer via two biological pathways known as STING and NLRP3. Immunotherapy drugs like Merck & Co.'s Keytruda work by aiding T cell recognition of tumors, a process that's part of the adaptive immune system.
The two Novartis deals, by contrast, center on work IFM has done to develop inhibitors of NLRP3, STING and a third pathway called cGAS. The thinking here is that blocking misfiring signals along one of those pathways could help treat inflammatory disease.
"We're at the crest of the wave," said Seidel.
"This pathway was implicated initially in rare human genetic diseases associated with mutations that cause activation of the pathway, but now we're tying aberrant activation of this pathway to larger diseases or broader disease populations."
For example, mutations activating STING are behind several rare diseases including Aicardi-Goutières syndrome and a subset of systemic lupus erythematosus. IFM also points to nonalcoholic steatohepatitis, chronic obstructive pulmonary disease and age-related macular degeneration as diseases in which abnormal STING activation could play a role.
For now, work through IFM Due will be a priority for Glick's team, which numbers about 35 employees. But Glick predicts more subsidiary launches to come in the not-too-distant future as well.