Cambridge Biotech Quartet Medicine to Shut Down by Year End
Quartet was founded by researchers at Boston Children’s Hospital and Ecole Polytechnique Federale de Lausanne (EPFL) in Switzerland along with Atlas Venture. Series A investors included Atlas, Novartis Venture Funds, Pfizer Venture Investments and Partners Innovation Fund. The company’s focus is developing treatments for chronic pain and inflammation. And Merck had also invested in the company, dropping $10 million in an upfront payment with the possibility of a $575 million buyout if the company made it through Phase IIa.
In addition, Dallas-based Remeditex Ventures and two Chinese companies based in Shanghai invested $6.25 million last year.
And then a disaster came late last summer. Booth wrote, “In August, Quartet observed some concerning and unexpected neurologic effects in the last few days of treatment in the GLP 28-day toxicology study, the final piece to round out our otherwise clean and complete IND package. Unfortunately, the tox signal was likely ‘on target’ mechanistically….”
So, the company and its investors, had a couple options. One was to continue working on a backup compound for the next two or three years, although apparently, the backups used the same mechanism and targets, meaning the likelihood of success was low. Another was to fold the company.
The company had seven staffers, who apparently have now headed off to other positions. Booth told John Carroll with Endpoints News, “Wind down nearly complete (by year end is goal). We have recycled everyone into EIR (entrepreneur in residence) roles (e.g., Gerhard, Mark, et al) or into other startups (e.g., Steve into Rodin). Even the EA/Office Manager, Oanh Sam, is now my EA.”
The names he refers to are Gerhard Koenig, Quartet’s president and chief executive officer, Mark Tebbe, vice president, head of Drug Discovery, and Steve Sweeney, vice president of Development Operations.
Booth also notes, in terms of the toxicology signals, that the adverse events weren’t observed in the 14-day studies and it wasn’t caused by drug accumulation. It was a possible liability, as discussed in the original 2013 investment memo, but Booth says, “We thought we had addressed this issue in the profile. But the way this signal showed up made it tough to manage.”
The company’s team dug deeper quickly and looked for potential approaches, but decide the “probability of technical success was now just too long to continue,” Booth writes. “Getting a drug’s brain exposure to zero isn’t technical tractable. Biology, especially around novel mechanisms, is hard.”
The company had been considering a third tranche in its Series A, but rather than throw good money after bad, decided to wind down the project. Booth writes, “As an asset-centric investment, the project was the company: all-in, ~$16 million in equity was lost, about a quarter of which was from Atlas. We’re in the final steps of shutting the doors of this successful failure.”