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Jul 29, 2013

Celgene Raises Acetylon Stake with Option to Buy for Potentially $1.6B+

  • Celgene agreed to advance development of Acetylon’s lead product candidate and two of the company’s other experimental drugs—in a deal that could net Acetylon over $1.6 billion, the company said today, but which also gives Celgene an option to buy its collaboration partner.

    In signing a strategic collaboration and option agreement with Acetylon, Celgene raises its stake in the developer of histone deacetylase (HDAC) inhibitors nearly seven-fold. Celgene agreed in February 2012 to invest in Acetylon by buying $15 million of its Series B-2 Preferred Stock—but did not receive rights or options to Acetylon technology at the time.

    The newest deal focuses on continued clinical development by Celgene of Acetylon’s lead drug ACY-1215 (rocilinostat), an oral first-in-class selective HDAC6 inhibitor for hematological malignancies, as well as the HDAC1/2 inhibitor ACY-738 for neurological diseases, and a yet-to-be-named drug with both cancer and noncancer indications.

    ACY-1215 is now in Phase Ib clinical development for multiple myeloma. As of May 8, Acetylon was recruiting participants for a Phase Ib study announced last year to determine the best dose of ACY-1215 in combination with Revlimid (lenalidomide) and dexamethasone in patients with relapsed or relapsed/refractory multiple myeloma.

    Last year, Acetylon teamed up with the Leukemia and Lymphoma Society to begin recruiting patients for ongoing studies—a Phase I a&b study examining the best dose of oral ACY-1215 alone and in combination with Velcade® (bortezomib) and dexamethasone for relapsed or relapsed/refractory multiple myeloma; and a Phase IIa study of the response rate of all three drugs for relapsed or relapsed/refractory multiple myeloma.

    Celgene agreed to pay $100 million upfront to Acetylon, which retains control of its drug development programs during the period of Celgene’s option to acquire the company. If Celgene exercises its option to acquire Acetylon, it will pay a minimum $500 million at the time of closing, while Acetylon shareholders will also be eligible for up to $1.1 billion in potential future milestone payments for either approvals or additional indications of drugs developed by Acetylon, as well as for accomplishing undisclosed sales targets.

    If all milestones are achieved, Celgene would pay Acetylon $850 million for sales milestones; $250 million for regulatory milestones.

    “Acetylon's work in epigenetics and resultant pipeline has shown significant promise,” Mark Alles, Celgene's evp, global head of hematology and oncology, and nonvoting observer to Acetylon’s board of directors, said in a statement. “The expansion of our relationship with Acetylon from our original equity investment to this exciting strategic collaboration demonstrates our belief that Acetylon's highly selective HDAC inhibitors have the potential to meaningfully improve clinical outcomes for patients with a variety of diseases including hematology, oncology, diseases of the immune system, and neurodegenerative diseases.” 

    This story has been corrected from an earlier version, which misstated the total potential value of the deal. GEN regrets the error.


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