- Vertex will pay privately held biotech Skyhawk Therapeutics $40 million up front in a deal to develop small molecule drugs that can modify RNA and treat unspecified "serious diseases."
- The agreement gives Vertex options to license rights to programs that come from the work, after which the big biotech would take the lead on development and commercialization. The deal is heavily backloaded, including up to $2.2 billion in downstream payments as well as royalties that would only materialize if all goes well.
- The alliance continues a string of deals for Vertex in untraditional fields of scientific research such as targeted protein degradation, messenger RNA therapeutics and gene editing, part of a plan to lessen its reliance on its core cystic fibrosis franchise. It also marks the latest indication of biopharma interest in chemical-based drugs that target RNA.
Fortunes can change in a blink in biotech, a lesson Vertex knows all too well.
Seven years ago, Vertex saw its once-promising hepatitis C drug franchise quickly wiped out in the face of competition. Few companies could have survived the blow, but Vertex had a burgeoning cystic fibrosis program to lean on. It rode the success of that program, which has produced four marketed drugs, to the type of consistent profitability it had never previously achieved.
The disintegration of its hepatitis C business — something ex-CEO Jeff Leiden once referred to as a "neck snapping phenomenon" — has weighed heavily on the company. It has deployed a multi-pronged strategy to diversify while defending its turf in CF, aiming to avoid a redux.
Dealmaking with up-and-coming biotechs in particularly edgy, unproven fields of science has become a key part of that plan. Since 2015, the company has either aligned itself with, or acquired biotechs pursuing CRISPR gene editing, messenger RNA therapeutics, cell therapy for diabetes, and more.
The importance of this effort became clear in October, after a setback to a key research program that knocked Vertex shares down 20% and increased scrutiny on the rest of its pipeline. One potential star has emerged already, a gene editing program from CRISPR Therapeutics that has shown promise in the blood diseases sickle cell disease and beta thalassemia.
Vertex continues to do deals in search of others, and that hunt has now led it to small molecule drugs meant to modify RNA, an approach that could open up access to previously untouchable drug targets. Progress understanding RNA biology and how to intentionally, effectively freeze the shifty molecules with chemical drugs has led to the formation of several new biotechs over the past few years. Though their work remains early, a number of them, including Skyhawk, Arrakis Therapeutics and Accent Therapeutics, have cut deals with large pharmaceutical companies like Roche, AstraZeneca and Merck & Co.
Vertex is the latest to join the fray and team up with Skyhawk, which has already been working with Biogen, Merck & Co., Bristol Myers Squibb and several others. The two companies didn’t divulge many details about their partnership beyond plans to treat "multiple serious diseases."
Skyhawk is working in a broad range of therapeutic categories including cancer, neurology, inflammatory conditions and rare diseases.