Despite Concerns About Market Volatility, Roche Acquires Adheron for $580 Million
October 9, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Swiss-based Roche acquired San Francisco-based Adheron Therapeutics for up to $580 million today.
Adheron focuses on technology that disrupts cell adhesion, which has potential applications for a variety of diseases. Its focus is Cadherin-11 (Cad-11), a surface protein found on fibroblasts in the skin and lungs, and fibroblast-like synoviocytes (FLS) found in the joints. Cad-11 helps cells stick together and, according to the company, “changes in Cad-11 interactions can induce the cells to produce proteins that influence the cellular environment positively or adversely.” Cad-11 appears to be involved in rheumatoid arthritis, as well as in several fibrotic diseases.
The company’s lead product, SDP051, is a humanized monoclonal antibody. It has completed a Phase I clinical trial.
As part of the deal, Adheron’s shareholders will get a $105 million upfront payment in cash, and up to $475 million in potential milestone payments.
SDP051 was humanized using Cambridge, England-based Abzena’s Composite Human Antibody technology. The compound was one of 10 clinical-stage Composite Human Antibodies in Abzena’s portfolio.
“The acquisition of Adheron by a major pharma company is great endorsement and validation of our Composite Human Antibody approach for creation of fully humanized therapeutic antibodies,” said John Burt, chief executive officer of Abzena in a statement. “This is also the third time we have seen the acquisition of a biotech company, pursuing products created through the application of our technology to improve their clinical profile.”
Abzena provides services and technologies to research and development organizations. It has three wholly-owned subsidiaries that provide different types of services. They are PolyTherics, Antitrope and PacificGMP.
“We are very excited about this acquisition, as it is an important step towards the development of breakthrough medicines in the area of inflammation and fibrosis,” said Hari Kumar, chief executive officer of Adheron in a statement. “This deal brings together Adheron’s deep understanding of the underlying science of Cadherin-11 with Roche’s vast experience in researching and developing next generation medicines. We are proud to move our promising investigational medicine to the next level and into a new home at Roche.”
This deal marks Roche strengthening its position in autoimmune and fibrotic diseases. In Aug. 2014, Roche acquired InterMune, Inc. for $8.3 billion. InterMune, located in Brisbane, Calif., focuses on developing therapies in pulmonology and fibrotic diseases. It’s lead drug, pirfenidone, is marketed as Esbriet in the U.S., Europe and Canada for idiopathic pulmonary fibrosis (IPF).
The acquisition of Adheron is consistent with Roche’s history of not making large buys, with the exception of its 2009 acquisition of Genentech for $46.9 billion. In 2014, it acquired Seragon Pharmaceuticals for $725 million, and about $250 million for Santaris Pharma.
In a September interview with Reuters, Severin Schwann, chief executive officer of Roche, said he felt that biotechnology was in a “bubble,” that drove up the prices of medium-sized companies. “I think this bubble will burst at some point,” he said. He indicated the company had looked at a number of acquisitions, but concluded, “For us, none of them make sense and when I see this all the time, I am worried that valuations are too high. This whole segment is overvalued. The more time goes by, the more I am worried that this whole thing will collapse at some point and it will not be good for the industry if there is too much volatility.”
Adheron was launched in 2006 and at that time called Synovex Corp. It was built on research by Michael Brenner and David Lee, researchers at Brigham and Women’s and Harvard. Early funding was provided by Healthcare Ventures, Medimmune Ventures, SR One, Thousand Oaks, Calif.-based Amgen , and Brigham and Women’s.