The sale of Germany-based Breath comes after the company launched two late-stage trials assessing its lead product as a treatment for a disease that affects lung transplant patients.
European venture capital firm Sofinnova Partners sold its portfolio company Breath Therapeutics to Zambon, an Italian pharmaceutical company for €140 million ($155 million) in an upfront payment. The deal could rise to €500 million, about $555 million, depending on Breath’s clinical outcomes.
The sale of Munich, Germany-based Breath comes after the company launched two Phase III trials for bronchiolitis obliterans syndrome (BOS), a rare disease that results in respiratory failure and death in many lung transplant patients. Breath launched in 2017 as a spinout of PARI Pharma, which is based in Munich. The company has been under the Sofinnova Partners umbrella for a little more than two years. The move to Zambon will complement that company’s focus, which includes a focus on rare diseases that include those involving the respiratory system, as well as Parkinson’s disease and cystic fibrosis.
Breath Chief Executive Officer Jens Stegemann said the company is looking forward to “moving into a new dimension” with Zambon. Stegemann said Sofinnova Partners played an instrumental role in getting Breath to the position it is now with two Phase III trials involving the company’s lead product, L-CsA-i, a novel proprietary liposomal formulation of Cyclosporine A. L-CsA-I was designed for inhaled administration with the drug-specific, investigational customized nebulizer from PARI. When Breath launched its Phase III trials, Stegemann told BioSpace that it was a major milestone for the two-year-old company. During an interview in April, Stegemann said the launch of the late-stage trials is “indicative of the outstanding progress we Breath Therapeutics have achieved in the past 24 months.”
Roberto Tascione, Zambon’s CEO, said the acquisition of Breath was the largest for privately-held Zambon. He said the deal “reinforces Zambon’s commitment to serve severe respiratory diseases, enhancing and broadening our offering to the healthcare system, and complements our late-stage pipeline.”
The executive team of Breath Therapeutics is expected to continue to play a key operational role post-acquisition.
Since its beginnings, Sofinnova has been with Breath. The venture capital firm co-led Breath Therapeutics’ €43.5 million Series A financing along with Gimv. Graziano Seghezzi, managing partner at Sofinnova Partners and a member of the board of directors at Breath Therapeutics, praised the work done by the Breath team and called the company a “perfect symbol of our investment strategy: cutting-edge platform and products developed by brilliant entrepreneurs for a debilitating disease with no effective treatment.”
“We had a clear vision in mind for a transatlantic operation with strong bases in Europe and in the U.S. to maximize the commercial opportunity. We’ve achieved that vision and assembled a stellar management team by complementing the founders’ European skills with deep U.S. clinical, regulatory and commercial expertise,” Seghezzi said in a statement.
BOS, the focus of Breath’s Phase III trials, occurs when the body’s immune system attacks the small airways of the transplanted lungs and destroys the bronchioles. The disease is caused by T-cell mediated inflammation that leads to the blockage of bronchioles in the lungs. There are more than 30,000 lung transplantation and allogeneic hematopoietic stem cell transplantation recipients worldwide currently affected by BOS, according to Breath. In the April interview, Stegemann told BioSpace that approximately 50 percent of lung transplant patients will be affected by BOS. The immune response to the transplant is one of the main reasons why lung transplants have the poorest outcomes, Stegemann said.
Breath launched the two late-stage trials, the BOSTON-1 trial for individuals with BOS following a single lung transplant and BOSTON-2, for double lung transplant patients. Both studies will enroll 110 participants from leading lung transplant centers in eight countries. The trials will take 48 weeks. When the studies are complete, the patients will be eligible to continue in the planned BOSTON-3, an open-label extension trial.
