Cortexyme has entered into a deal to acquire Novosteo. Once the deal is finalized, the companies will enter the rare disease space and operate under the name Quince Therapeutics.
Cortexyme, a company focusing on treatments for degenerative diseases, has entered into a deal to acquire Novosteo, which plays in the rare disease space. Once the deal is finalized, the merged companies will operate under the name Quince Therapeutics and trade under the ticker symbol QNCX.
“We have assembled a highly experienced and impressive team to aggressively pursue the company’s next stage of growth,” said Dr. Dirk Thye, M.D., CEO of Novosteo. “We intend to capitalize on the combined assets of Novosteo and Cortexyme by driving our therapeutic candidates through development, expanding our targeted drug discovery platform, and pursuing new business development opportunities.”
Thye will lead the merged companies as chief executive officer, with Dr. Karen Smith, M.D., Ph.D., as chief medical officer of Cortexyme. Smith is currently CMO of Novosteo. Thye and Philip Low, Ph.D., a current director of Novosteo, will join the board of directors.
“The acquisition of Novosteo reflects the strategic expansion of our pipeline, which remains focused on bringing innovative therapeutics to diseases with high unmet clinical needs,” said Chris Lowe, Cortexyme’s interim chief executive officer. “We are excited about the addition of Novosteo’s targeted therapy platform and extensive preclinical data to our expanding therapeutic pipeline. I believe the appointments of Dr. Dirk Thye as CEO and Dr. Karen Smith as CMO will bring exceptional expertise to lead the company.”
No financial details were released, although upon completion, the combined company will have about $120 million in cash, cash equivalents and investments as of March 31, 2022. Once the deal is closed, Novosteo stockholders will own about 15.5% of the combined company.
Cortexyme’s pipeline ranges from Alzheimer’s to periodontal disease. The company recently completed a Phase II trial of COR388, a Kgp inhibitor for Alzheimer’s disease, and its website indicates plans to initiate a Phase II trial of its COR588, also a Kgp inhibitor, in Alzheimer’s disease in the second half of this year.
Cortexyme also plans to initiate a Phase II trial in the second half of this year of COR388 for high-risk oral potentially malignant disorders. It’s not clear if the company will be successful in this since the drug appears to still be under a full clinical hold in the U.S. Cortexyme presented data on the drug in March but did not discuss the clinical hold. It indicates it will release more information about its pipeline once the deal is closed.
The drug, also called atuzaginstat, is a small molecule novel virulence factor inhibitor. It targets gingipains, toxic proteases produced by Porphyromonas gingivalis that have been identified in 90% of Alzheimer’s patients. P. gingivalis is a Gram-negative bacterium that can produce neurodegeneration in animal models.
On March 21, Cortexyme presented new target engagement and biomarker data from the GAIN trial of COR388 on lysine gingipain inhibition in neurodegeneration as a biomarker related to Alzheimer’s disease. “The evidence demonstrates our target - P. gingivalis - may play a key upstream role in both of these areas, and correlations between P. gingivalis biomarkers and clinical assessments show that our ability to inhibit this target potentially leads to improved patients gains,” said Dr. Michael Detke, M.D., Ph.D., Cortexyme’s chief medical officer.
But in February 2021, the U.S. Food and Drug Administration placed a partial clinical hold on COR388. The agency placed the hold after a review of the trial data identified adverse liver events. The hold halted the enrollment of new participants in the open-label extension phase of the GAIN trial. Otherwise, the double-blind, randomized, placebo-controlled study was fully enrolled with 643 AD patients. They continued to receive the drug at their assigned dose.
One year later in February 2022, the FDA placed a full clinical hold on the trial. Cortexyme had implemented a cost-cutting program with an expected cash runway through 2024, and it planned to focus its efforts on COR588.
Novosteo’s focus is on rare skeletal diseases, bone cancer and injury. Its drug, NOV004, is engineered to target the bone fracture site. This enables higher concentrations of a therapeutic peptide for longer periods directly at the injury site.
In preclinical studies, this had resulted in improved retention at the bone fracture surface, causing a robust healing response. In preclinical fracture studies, NOV004 increased new bone production three-fold, with bone that was almost twice as dense as bone treated with non-targeted therapeutics. The bone production and stability occurred as early as 12 days post-fracture in animal studies. Novosteo expects to enter Phase I in 2023 and focus on osteogenesis imperfecta.
