Zogenix Buys Modis in $400 Million-Plus Deal to Make Larger Rare Disease Company
Under the terms of the deal, Zogenix is paying Modi an upfront fee of $250 million made up of $175 million in cash and $75 million in Zogenix common stock. Modis will also be eligible for milestone payments—$100 million if and when the U.S. Food and Drug Administration (FDA) approves MT1621 in the U.S. and $50 million if and when the European Medicines Agency (EMA) approves the drug in Europe. Zogenix will also pay a 5% royalty on any future net sales of the drug.
“This transaction advances Zogenix’s mission to become a leading rare disease pharmaceutical company by adding MT1621 to our pipeline of late-stage Fintepla programs,” stated Stephen J. Farr, president and chief executive officer of Zogenix. “Based on the compelling clinical data generated to date, we believe that MT1621 has the potential to significantly alter the course of the disease and improve outcomes in patients with TK2d. With Breakthrough Therapy and PRIME designations, MT1621 may be eligible for an accelerated regulatory path in both the U.S. and Europe, and we look forward to meeting and working with regulatory authorities to discuss new steps for the program.”
MT1621 is a deoxynucleoside substrate enhancement therapy for Thymidine Kinase 2 deficiency (TK2d), an inherited mitochondrial DNA depletion disorder that mostly affects children. The disease is often fatal.
A Phase II trial of MT1621 was recently finished. The study showed a substantial treatment benefit for patients. There were 38 patients from eight clinical sites in the U.S., Spain and Israel who received the drug for up to seven years. Results from the patients enrolled in what was dubbed the RETRO trial were compared to results from a comprehensive, global TK2d natural history dataset of 68 patients. The differences in survival probability was statistically significant for patients receiving MT1621, with all patients remaining alive. They also showed significant improvements in functional abilities, with some patients re-acquiring previously lost motor milestones. The drug was generally safe and well-tolerated. There were serious adverse events (SAEs) reported in four patients. Two adult-onset patients halted treatment from asymptomatic increases in aminotransferases, without increases in bilirubin. This resolved after discontinuing treatment.
On October 1, 2018, Modis closed a $30 million Series A round. It was led by F-Prime Capital Partners and OrbiMed. Founding investor Aceras Life Sciences and new investor Osage University Partners also participated.
MT1621 was based on research from the laboratory of Michio Hirano, chief of the Division of Neuromuscular Medicine at Columbia University Irving Medical Center, the laboratory of Ramon Marti, head of the Neuromuscular and Mitochondrial Pathology Research Group at Vall d’Hebron Research Institute in Barcelona, Spain, and other academic collaborators. Modis acquired exclusive worldwide rights to data and intellectual property related to a broad range of mitochondrial DNA depletion disorders from Columbia and Vall d’Hebron.
Hirano’s laboratory demonstrated that a combination of nucleosides, the active ingredients in MT1621, affects the direct cause of mitochondrial dysfunction, resulting in prolonged survival in animal models with TK2 deficiency. The research groups translated the research into treatment with TK2d patients.
In July, Zogenix announced it had completed enrollment for and randomized the last patient for Study 1601, its Phase III clinical trial of Fintepla (ZX008, fenfluramine) for seizures associated with Lennox-Gastaut Syndrome (LGS). LGS is a severe and difficult-to-treat childhood-onset epilepsy.
In April, the FDA issued a refusal-to-file letter for the company’s marketing application for Zogenix for seizures associated with another rare type of childhood epilepsy, Dravet syndrome. The agency indicated the marketing application lacked certain nonclinical toxicology studies that it would need to evaluate chronic administration of the drug. FDA also indicated it had an incorrect version of a clinical data set needed to complete the review process. Otherwise, the FDA did not request additional clinical efficacy or safety studies.