Danish pharma firm Lundbeck has agreed to acquire Abide Therapeutics for $250 million upfront.
The La Jolla, CA-based company, spun out of research from The Scripps Research Institute (TSRI), is developing drugs to treat diseases of the central nervous system, among them Tourette syndrome. Its drugs block enzymes known as serine hydrolases, which play a role in a slew of biological processes. The most advanced of those experimental treatments is ABX-1431, which is in human testing for Tourette’s syndrome and other neurological diseases.
Lundbeck could pay Abide shareholders up to another $150 million if the company’s drugs hit certain development and sales milestones.
Abide’s scientific co-founders are TSRI researchers Ben Cravatt and Dale Boger. Its sole institutional investor is Cardinal Partners. CEO Alan Ezekowitz (pictured) launched the company with Cravatt, Boger, and others in 2011.
A sale isn’t something the Abide team was anticipating when the year began, according to president and chief operating officer Kevin Finney, who joined the company in January.
At the start of this year, Finney says his marching orders were to arrange enough private financing to push ABX-1431 through Phase 2 testing and prepare Abide for an IPO.
About a year prior the company had ended a 2014 collaboration with Celgene (NASDAQ: [[ticker:CELG]]) that had given the Summit, NJ, firm an exclusive option to acquire Abide.
Abide was in the midst of arranging a financing round with a venture syndicate when discussions started with Lundbeck, according to Finney. Moreover, it was actively readying itself to go public—Abide had filed confidential IPO paperwork with the SEC, Finney says.
But the Lundbeck proposal was too good to pass up, he says.
While the Copenhagen, Denmark-based pharma said Monday that it is acquiring Abide for its drug discovery work, it also will turn Abide’s lab into its US hub.
“Lundbeck’s commitment to brain health convinced us that together this was the best way to attain Abide’s goal to develop novel therapeutics that make a fundamental difference in the lives of patients with a range of neurological and mood disorders,” Ezekowitz said in a prepared statement. “This together with the support for the La Jolla discovery site means that we can continue to leverage the insights of Ben Cravatt’s laboratory at Scripps Research and maintain our outstanding discovery team.”
Abide’s lead drug candidate is being studied as an alternative treatment for patients with Tourette syndrome, which causes repetitive, involuntary movements, and vocalizations known as tics. It’s also in Phase 1 testing as a treatment for neuropathic pain.
Lundbeck is led by Deborah Dunshire, a veteran of the Boston biotech scene who became the Danish firm’s CEO nearly a year ago.
The deal is expected to close this quarter.
