Eight years after San Diego biotech Prometheus Laboratories was acquired by Nestlé Health Science, the diagnostic business has been sold again, this time to a little-known biotech called Precision IBD that plans to lay off approximately a quarter of Prometheus’s workforce.
Precision IBD, which is also based in San Diego, is a drug and diagnostic developer that’s focused on inflammatory bowel disease, and has a direct tie to Prometheus: Precision’s chief medical officer, Steph Targan, is a co-founder of Prometheus. By year’s end, the buyer plans to lay off 72 of the roughly 280 people that Prometheus employed at the time of the sale, according to a July 1 filing with the California Employment Development Department.
“The decision to divest Prometheus follows a review of the Nestlé Health Science global business portfolio, which is conducted periodically to assure continued alignment of Nestlé Health Science’s top strategic priorities,” a Nestlé Health spokeswoman told Xconomy in an email. Nestlé Health is a division of Swiss food-and-drink company Nestlé S.A.
The spokeswoman says Nestlé Health is not disclosing financial terms of the transaction. (It also didn’t say how much it paid for Prometheus in 2011, but an investor of Precision IBD says the deal was worth $650 million.)
Email and phone messages to Precision for comment on the acquisition weren’t immediately returned.
The new deal, which closed June 30, transfers nearly all of the gastroenterological diagnostic testing service company to its new owner.
However, Nestlé Health is keeping the Prometheus point-of-care diagnostic business. The unit will stay in San Diego under the name Procise Dx and employ a limited number of people, according to the spokeswoman.
Earlier this year Nestlé Health sold off Prometheus’s sole oncology drug. The San Diego company had received the US rights to aldesleukin (Proleukin), a treatment for kidney and skin cancer, from Novartis in 2010. The Swiss pharma giant this year exercised an option to take back the rights for the drug, which it flipped to the UK’s Clinigen—which had acquired the rights to the drug outside of the US in 2018—for $210 million.
According to its website, Precision is developing drugs and companion diagnostics—tests that can determine whether someone is likely to respond to a therapy—for inflammatory bowel diseases. Precision claims to have access to a proprietary biobank and paired medical records, data which has enabled it to identify potential targets and drug candidates in patients with certain types of IBD.
The company, formed in 2016, raised about $10 million in November of last year, and about $3.6 million in October 2017, filings with regulators show.
Life Ventures, a local investment firm run by Douglas Wall, lists Precision in its portfolio. According to Life Ventures, Precision was started by Targan and CEO Scott Glenn. Discoveries that Targan made at the inflammatory bowel disease unit of Cedars-Sinai Medical Center in Los Angeles led to the company’s formation.
Targan and Glenn have worked together previously at two companies—including Prometheus, Life Ventures says. Glenn and Targan also worked together at San Diego’s Santarus Pharmaceuticals, which was sold to Bridgewater, NJ-based Salix Pharmaceuticals for $2.6 billion in 2013, according to Life Ventures.
