- Vertex Pharmaceuticals said Thursday it’s collaborating with a fellow Boston-based biotechnology company to develop new treatments for a rare muscle disease known as myotonic dystrophy type 1, or DM1.
- Terms of the four-year research pact have Vertex paying Entrada Therapeutics $250 million up front, a sum that includes a $26 million equity investment. Vertex, in turn, gets rights to develop DM1 drugs created through Entrada’s “EEV” technology platform — short for Endosomal Escape Vehicle.
- Entrada’s most advanced drug for DM1, called ENTR-701, is in preclinical development. Last month, the company said it plans to ask regulators to clear the drug for human testing sometime in the back half of 2023.
Founded in 2016, Entrada and its technology have attracted interest from a variety of investors. The company raised $59 million in late 2018 through a Series A financing round that was led by 5 AM Ventures and MPM Capital and saw participation from the Roche Venture Fund. Nearly three years later, Entrada raked in another $182 million via an initial public offering.
Now Vertex is investing. Along with its upfront payment, the big biotech has agreed to pay its new partner as much as $485 million if certain milestones are hit. Entrada may also receive tiered royalties from any products that result from the collaboration.
“Vertex’s strategy is to discover and develop transformative medicines for people with serious diseases, and DM1 has therefore been a disease area of interest to Vertex for some time,” said David Altshuler, the company’s chief scientific officer, in a statement Thursday.
Paul Matteis, an analyst at the investment firm Stifel, wrote in a note to clients that the collaboration between Vertex and Entrada is “interesting for a number of reasons.”
One on hand, the deal focuses on a technology platform and a genetic disease with unmet medical needs, which “fits right into the company’s wheelhouse,” Matteis wrote. Vertex, notably, became one of the world’s largest and most deep-pocketed biotechs by developing treatments for another genetic disorder, cystic fibrosis. Its scope has since expanded to include cell and gene editing therapies for a range of diseases, from sickle cell to Type 1 diabetes. Vertex has invested in therapies for another rare neuromuscular disorder, Duchenne muscular dystrophy, too.
Yet, Matteis also noted how Entrada is earlier in its research than other drugmakers targeting DM1, including the publicly traded biotechs Dyne Therapeutics and Avidity Biosciences.
“From the Vertex perspective though, this is a nice deal for a relatively modest upfront in the context of their balance sheet, and DM1 is a huge market,” he wrote. “Thus, while it's unclear to us if the [Entrada] technology is best-in-category, at this price for [Vertex] the risk/reward makes sense.”
Shares of Entrada had risen 20% by late Thursday morning, to trade at around $21.25 apiece.