Cortendo said today it will expand its rare-disease pipeline by acquiring one drug candidate and licensing another, in deals totaling up-to-$140 million-plus—as well as fund future development of the compounds by raising about $33.2 million through a private placement.

The Swedish biotech agreed to acquire the investigational drug Somatoprim (DG3173) from Aspireo Pharmaceuticals for approximately $30 million in Cortendo equity. The next-generation somatostatin analog (SSA) is preparing to advance to Phase III trials for acromegaly in newly diagnosed patients, and to Phase II for acromegaly patients insufficiently controlled under treatment with, or intolerable to, a marketed somatostatin analog. DG3173 is also under study for potential additional applications in Cushing’s Syndrome and neuroendocrine tumors.

DG3173 is a somatostatin ligand based on a novel amino acid composition and a backbone cyclization technology designed for metabolic stabilization of the peptide. DG3173 was shown to reduce growth hormone secretion with reduced effects on insulin secretion and glucose levels as compared to octreotide in two single ascending dose Phase II studies in acromegalic patients, Cortendo said.

At higher dose levels, the number of patients with normal growth hormone levels was comparable to that achieved after administration of octreotide. Side effects were consistent with those observed in Phase I—where in three dose-escalation studies in healthy men, DG3173 was also seen to inhibit growth hormone secretion in a dose-dependent fashion.

In preclinical testing, Cortendo said, DG3173 showed potent inhibition of growth hormone secretion without effect on insulin, key hormones for metabolic control. An assessment of growth hormone secretion in cultured human adenoma cells from acromegaly patients treated with DG3173 showed a higher level of responsiveness suggesting that the compound could increase the response rate of acromegaly patients to SSL therapy.

The deal for DG3173 is subject to approval by Cortendo shareholders, which the company plans to secure at its annual general meeting, to be held on or about June 24.

Cortendo also said it entered into an exclusive licensing agreement with Antisense Therapeutics for development and commercialization rights outside of Australia and New Zealand to ATL1103, a clinical-stage treatment for endocrinology applications unspecified in an announcement by the companies.

According to Antisense’s website, ATL1103 is a second-generation antisense drug designed to block growth hormone receptor (GHr) expression—thus reducing levels of the hormone insulin-like growth factor-I (IGF-I) in the blood—and is a potential treatment for diseases associated with excessive growth hormone action. These diseases include acromegaly, diabetic retinopathy, diabetic nephropathy, and some forms of cancer, the company said.

In March, Antisense began patient enrollment in a higher dose study of ATL1103 in patients with acromegaly. The follow-on study to the drug candidate’s successful Phase II trial is designed to support its use in dose escalation in patients with more active disease during a future Phase III clinical trial. The open-label study will assess the safety, tolerability, pharmacokinetics and efficacy [effect on serum IGF-I] of ATL1103 in adults with acromegaly dosed twice weekly with the compound at 300mg for 13 weeks (600mg weekly), with two months of follow up.

Cortendo agreed to oversee ongoing clinical development of ATL1103, and will fund associated future development, regulatory, and drug manufacture costs, the company said. Antisense will retain commercialization rights for ATL1103 in endocrinology applications in Australia and New Zealand, as well as worldwide rights for other ATL1103 indications, and may use new ATL1103 data generated by Cortendo in pursuing these other indications, subject to terms and conditions.

In return, Cortendo agreed to pay Antisense A$6.2 million ($5 million) upfront, consisting of A$3.7 million ($3 million) cash and a A$2.5 million ($2 million) investment in Antisense equity. Cortendo also agreed to pay up to A$131 million ($105 million) in payments tied to achieving development and commercialization milestones, with the potential for royalty payments based upon sales performance.

“This is a significant deal not only for Antisense Therapeutics and its shareholders, but also for the Australian biotech industry as a whole,” said Mark Diamond, Antisense’s CEO and managing director. “We aim to unlock further value from our pipeline, including ATL1102 for MS and other potential indications for ATL1103,” Diamond added.

To fund development of ATL1103 and Somatoprim—as well a Phase III drug already in Cortendo’s pipeline—the company agreed to raise approximately $33.2 million in a new private placement. The subscription price is $1.322 per share, with up to 25,128,559 new shares to be issued to investors.

“The addition of two novel, late-stage investigational compounds for the treatment of rare endocrine disorders, DG3173 and ATL1103, coupled with our existing Phase III asset for endogenous Cushing’s Syndrome, COR-003, establishes the cornerstone of Cortendo’s rare endocrine disease franchise and demonstrates our commitment to becoming a leader in providing innovative therapeutic options to patients with rare diseases,” Matthew Pauls, Cortendo’s president and CEO, said in a statement.

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