January 6, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Cambridge, Mass.-based Rodin Therapeutics announced today that it had signed an agreement with Cambridge, Mass.-based Biogen and Atlas Venture totaling $17.3 million. This is what is dubbed a built-to-buy deal. Biogen has the option to buy Rodin at specific pre-defined milestones at pre-negotiated terms. Various total upfront and milestone payments can reach up to $485 million.
In addition to the financing, Rodin and Biogen have agreed to collaborate on neuronal epigenetic research. Samantha Budd Haeberlein, vice president of clinical development for Biogen, will join the Rodin board of directors.
“Our investment in Rodin fits perfectly into our mission to bring innovative therapies to people with neurodegenerative disease and few treatment options,” said Haeberlein in a statement. “Rodin’s expertise in HDAC2 inhibition and epigenetics also complements our significant investment in neuronal epigenetic research, and we look forward to working with the Rodin team.”
Atlas Venture also announced today a built-to-buy deal between Merck & Co. and Cambridge, Mass.-based Quartet Medicine. In that deal, Quartet receives up to $20 million split across an upfront payment and future millstone payments with a total possible acquisition deal that could total up to $575 million.
Built-to-buy deals, on the pro side, can sidestep the complicated multiple venture rounds on a road toward an eventual initial public offering (IPO), is generally faster to an acquisition deal, and has the advantage of an interested and committed buyer and potential partner in development.
On the con side, the investors are locked into a specific price cap, and if the company’s eventual product has enormous unexpected potential, the real winner might be the acquiring company by getting a fantastic deal on a blockbuster company. Writing for Xconomy, Ben Fidler said, “The upside is capped early on, meaning there won’t be the type of windfall a venture firm could see as a founder and eventual IPO shareholder in a successful biotech.”
Rodin is focused on developing drugs for cognitive disorders. It was founded in 2013 by Atlas Venture and Proteros Biostructures. This investment in Rodin makes complete sense on the part of Biogen, which recently announced a shift from its highly successful multiple sclerosis (MS) drug focus to the even riskier, but potentially lucrative, Alzheimer’s market.
“Central nervous system diseases—in particular, neurodegenerative conditions such as Alzheimer’s disease—represent some of the most challenging areas of drug discovery and development,” said Adam Rosenberg, Rodin’s president and chief executive officer, in a statement. “There remains a compelling need for innovative therapeutic approaches. I believe strongly that early collaboration with a strong pharmaceutical company to progress treatment towards and through clinical trials results in a higher probability of success, especially in neuroscience. We are thrilled to be working with a leading company such as Biogen, that has so clearly focused its research and development efforts on neurology.”
In May 2014, Rodin reported a $12.9 million Series A financing round that was led by current investors Atlas Venture and Johnson & Johnson Development Corporation (JJDC). At that point it also created a Scientific Advisory Board, chaired by LI-Huei Tsai, professor at the Massachusetts Institute of Technology. Additional members included Jeffrey Nye of Johnson & Johnson Innovation , Marcelo Wood of the University of California, Irvine, Lisa Monteggia from the University of Texas Southwestern, Andre Fischer of the University of Gottingen, Ed Holson of the Broad Institute, and Stephen Haggarty from the Massachusetts General Hospital.
