Constellation Pharmaceuticals Quietly Cuts 23 Employees as Genentech's Decision Looms
January 19, 2015
By Mark Terry, BioSpace.com Breaking News Staff
In January 2012, Cambridge, Mass.-based Constellation Pharmaceuticals, Inc. has completed a strategic agreement with Genentech to launch an epigenetics and chromatin biology collaboration, laying off 23 employees in the process. About 55 staff members remain.
“The collaboration came to an end this month,” said Keith Dionne, chief executive of Constellation in a statement. “Genentech chose three targets for exclusive development, with milestones and royalties going forward.”
Although nobody is currently discussing what the terms of the final deal are or specifics regarding the milestones and royalties, one of the options for Constellation is to be acquired by Genentech. Dionne isn’t speculating.
“Genentech will either acquire us, or not,” said Dionne in a statement. “What we’re planning with this reorganization is our independent future path if Genentech does not.”
In the original deal, Constellation received committed funding of $95 million made up of an upfront payment and a three-year collaboration period that included research funding. The research focused on the development of inhibitors of the BET chromatin reader and EZHs chromatin writer proteins. Research has found that transcription of the MYC oncogene can be suppressed by inhibitors of the BET family. The histone lysine methyltransferase EZH2 is implicated in repressing gene expression, also involved in cancer cell growth.
The deal had two broad components that were a little unusual. First, Constellation retained exclusive rights to its two advanced programs related to BET and EZH2. The second part was that Genentech could acquire Constellation if certain pre-negotiated terms were met.
While acquisition rumors spin, Constellation will work toward three Phase 1 studies for its lead product, CPI-0610, a potential treatment for lymphoma, leukemia and multiple myeloma. The company also hopes to get its program targeting EZH2 into clinical trials later in 2015. If Genentech declines to stay involved or acquire the company, Constellation will be free to initiate collaborations with other companies.
In October 2014 Constellation announced it had pulled together a $15 million senior secured loan with Oxford Finance and Silicon Valley Bank. It had also closed on a Series D round of equity from existing investors Third Rock, The Column Group, Venrock and SROne. The money is expected to help with the CPI-0610 clinical trials, and a CPI-1205 clinical trial.