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Edison expands Dainippon partnership in potential $4.295B deal

By Marie Powers, Staff Writer

Privately held Edison Pharmaceuticals Inc. broadened its partnership with Dainippon Sumitomo Pharma Co. Ltd. (DSP) in a big way, inking a potential $4.295 billion strategic alliance with the Japanese pharma to develop drugs targeting cellular energy metabolism.

In March 2013, the two companies crafted a potential $545 million deal for development and commercialization rights in Japan for Edison’s lead program, EPI-743, and for follow-on molecule, EPI-589, in pediatric orphan inherited mitochondrial and adult central nervous system diseases. (See BioWorld Today, March 29, 2013.)

EPI-743 is an orally bioavailable small molecule in development for inherited mitochondrial diseases. A member of the para-benzoquinone class of drugs, the compound targets the enzyme NADPH quinone oxidoreductase 1.

Under terms of the expanded agreement, DSP gains select development and commercialization rights in Japan and North America to jointly discover drugs in exchange for a $10 up-front payment and a $40 million payment to support R&D. In addition, DSP is fully funding the development of 10 jointly discovered drugs through investigational new drug application filing and broadening its rights to EPI-589, currently in a Phase Ib study, to include North America.

EPI-589 is a next-generation, reversible redox co-factor that Edison and DSP are advancing in adult central nervous system disease. The work is based on a body of data implicating redox and mitochondrial dysfunction as a root cause of neurologic disorders.

The big payout could come in milestones. Edison is eligible for $30 million to $105 million per indication for successful development of EPI-589 in North America, $10 million to $30 million per indication for successful development of jointly discovered compounds in Japan and North America and up to $3.86 billion in commercial milestone payments for jointly discovered compounds and EPI-589. In addition, the Mountain View, Calif.-based company will receive double-digit royalties on commercial sales.

DSP also agreed to invest $50 million in Edison through a preferred stock purchase agreement, with the option for an additional $50 million during the period between the first and fifth anniversaries of the initial equity closing, at the discretion of Edison.

Edison co-founder Guy Miller, who has served as chairman and CEO since the company was launched in late 2005, said the company retained all rights to EPI-743 and all rights across the transaction in pediatric and pediatric rare diseases, ex-Japan.

“We intend to use the capital generated in this transaction to further build Edison into a pediatric-focused commercial-stage pharmaceutical company,” he said. “In addition, the R&D support and parallel efforts with the Dainippon Sumitomo Pharma team will allow us to build out our pipeline with 10 new drugs targeting various aspects of cellular energy metabolism.”

Based on their joint efforts to date, both companies believe the cellular redox network is an untapped reservoir of drug targets, especially for high energy-consuming organs, such as the brain. Thus, the R&D program will continue to focus on the characterization of the redox control energy system critical to the generation and regulation of cellular energy metabolism.

DSP’s expanded investment in the partnership accelerates Edison’s first-mover advantage in redox drug development, Miller added, allowing the companies to expand Edison’s pipeline and to bring 10 additional compounds into clinical development over the next five years.

See Monday's BioWorld Today for More on This Story.