Edison Pharma Lands Dainippon in Potential $545M Japan Deal
By Marie Powers
Privately held Edison Pharmaceuticals Inc. wooed a big pharma partner, inking an R&D and commercialization agreement with Dainippon Sumitomo Pharma Co. Ltd. (DSP) to develop lead program EPI-743 and follow-on molecule EPI-589 in Japan.
Terms called for Edison to receive $35 million up front and $15 million in R&D support. The Mountain View, Calif.-based biotech also will be eligible to receive $10 million to $35 million in development milestones per indication and up to $460 million in commercial milestone payments, as well as royalties on commercial sales. DSP gained development and commercialization rights to the compounds in Japan, but no ownership or control over development activities elsewhere.
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. EPI-743 is in U.S. Phase IIb trials in Leigh syndrome and in Friedreich's ataxia, both ultra-rare indications.
The initial scope of the transaction includes both pediatric orphan inherited mitochondrial and adult central nervous system diseases. DSP will assume activities required for development, approval and commercialization of EPI-743 in Japan, initially focusing on orphan pediatric mitochondrial disease.
The companies also will collaborate to advance EPI-589 – a next-generation, reversible redox co-factor – with a focus on adult central nervous system disease. The work will be based on an emerging body of data implicating redox and mitochondrial dysfunction as a root cause of neurologic disorders.
Founded in late 2005, Edison worked quietly for six years to demonstrate proof of concept on its translational platform, based on redox biochemistry – the foundation from which cells generate and regulate energy metabolism – and to bridge key discoveries in genetically confirmed pediatric rare mitochondrial diseases to major adult central nervous system disorders such as Alzheimer's disease and Parkinson's disease, where redox and mitochondrial dysfunction also may play a critical role. Along the way, the company amassed more than 100 patents spanning cell biology, chemistry and drug discovery methods.
The company was launched with $6.2 million from a Series A financing and grant support from the Friedreich's Ataxia Research Alliance, the Muscular Dystrophy Association and Seek A Miracle, followed by a $4.25 million Series B preferred stock offering in 2007. (See BioWorld Today, Dec. 12, 2005.)
More rounds followed, though amounts were not disclosed, leading to a $20 million Series F in November 2011, led by Mitsui & Co. Global Investment Inc.
At that point, the company had initiated the Phase IIb trial of EPI-743 in children with Leigh syndrome, with the endgame in sight, recalled Guy Miller, Edison's chairman and CEO since its inception. The company began considering an initial public offering (IPO) or regional licensing transaction, based on the Phase IIb data.
Armed with Mitsui's connections and the sphere of influence of Mitsui's Taro Inaba, who sits on Edison's board, "we were very keen on the possibility of identifying a Japanese partner," Miller told BioWorld Today.
Following a road show in Japan last year with the goal of licensing commercial rights to EPI-743 in the country, Edison identified a handful of potential partners. DSP quickly rose to the top based on its commitment to "the concept of mitochondrial disease," its understanding of the role of mitochondria and redox chemistry in the orphan space and in adult brain disease and its willingness to propose economics that made sense for the smaller biotech.
Excepting "nominal rights of first discussion" on activities Edison might pursue outside Japan, DSP has "no equity interest, no board seat, no control over activities within the corporation and no control over our development activities outside Japan," Miller said.
Pocketing a fistful of cash while retaining development control for most of the world puts Edison "on the threshold of commercialization," with sufficient capital to complete clinical development and initiate commercial activities for EPI-743, he added. The company plans to meet with the FDA and European Medicines Agency this year to begin discussions leading to new drug applications through the orphan drug pathway, potentially with fast-track or breakthrough therapy designation.
In the meantime, Edison has met with most major IPO underwriters as well as venture firms that might support a mezzanine round.
"Given the emerging role of mitochondria and redox in aging, we're judiciously exploring taking more capital," Miller explained. Options for a "creative partnership" giving Edison certain control, regional distribution and co-promotion rights also are on the table, with discussions under way with a half dozen potential partners.
"The company's inclination is to maintain its autonomy and to get a drug to the children who desperately need it," Miller said, noting the company will have more insight into the path forward after meeting with regulators.
In addition to the U.S. Phase IIb trial, EPI-743 is being studied in a double-blind, placebo-controlled, single-site Phase II trial in Italy in Cobalamin C deficiency syndrome. Additional exploratory Phase II trials will be launched in children and adults throughout the year.
Miller declined to handicap a regulatory timetable. However, "we have a very effective drug in the laboratory," he said. "The strength of the medical signature around redox control that we're seeing in the laboratory we're also seeing clinically in subjects with mitochondrial disease. And the biochemical signature that we're seeing in the laboratory correlates with the clinical improvement.
"The trilogy of a mechanism of action, a clinical improvement and a biosignature registered in the lab and at the bedside provides us and our partners as much comfort as anyone derives from first-in-class drug development programs," Miller said.
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