Biogen Idec has acquired a venture backed US company in a deal which promises up to $487.5 million but only costs $75 million upfront.

In a deal which looks much like a licensing pact, Biogen gains Stromedix’s lead candidate, a monoclonal antibody known as STX-100 which is about to enter phase II clinicals for idiopathix pulmonay fibrosis.

Since STX-100 comprises the value of Stromedix, acquisition as opposed to licensing makes sense.

Here’s the interesting point, Stromedix licensed the drug in 2007 from…..Biogen Idec. So Biogen Idec out-licensed a compound no-core to its interests in 2007 and now is reacquiring the very same asset some 5 years later by acquiring Stromedix. An interesting approach indeed. One can assume that the value added by Stromedix in the intervening years makes the drug interesting again.

The deal provides Stromedix’s investors with a 2x return on their original investment. The downside is now eliminated, the company no longer needs to worry about raising funds to progress the drug, but the upside could be up to 19x their initial investment, so it makes great sense for the investors to get out now.

It also makes good sense to Biogen Idec. They reacquire an emerging asset, so removing the potential for embarrassment of it ending up in the hands of a competitor, whilst at the same time mitigating risk to the upfront payment of $75 million. Should the drug progress through to the market th eupside will be shared with the investors in the form of development and approval milestones.

“With a well-established understanding of the fundamental biology and tremendous unmet medical need, fibrosis is one of the most exciting and dynamic areas of drug development today,” said Michael Gilman, Ph.D., Founder and CEO of Stromedix, who, before founding Stromedix, led Biogen Idec’s research organization from 2000 to 2005. “We appreciate Biogen Idec’s focus in immunology and their tremendous international R&D and commercial capabilities. By joining forces, we expect to accelerate the development of STX-100 and other promising early-stage drug candidates. This begins a new chapter for all of us at Stromedix, and we look forward to a bright future as part of Biogen Idec.”

It is interesting to see a company reacquire an asset previously considered off strategy.

Perhaps the idea of out-licensing non core assets to enable development outside the constraints of the bigpharma could be a valuable means of generating additional therapeutics options for the future, whether it be reacquired by the originator at a later date or subsequently acquired by a competitor.

Steve Poile

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