Galecto Biotech AB isn't the only biotech targeting galectin-3 to treat fibrotic diseases, and it doesn't have the most extensive or even the most advanced pipeline. But the 3-year old biotech, based in Copenhagen, Denmark, had the right stuff to attract Bristol-Myers Squibb Co. (BMS) to an exclusive option to acquire the company and gain global rights to its lead asset, TD139, for up-front and milestone payments that could reach $444 million.

TD139 is a highly potent, specific inhibitor of the galactoside-binding pocket of galectin-3 that is formulated for inhalation, enabling direct targeting to fibrotic tissue in the lungs while limiting systemic exposure. Galecto is developing the lead candidate, which is in a phase I study, to treat idiopathic pulmonary fibrosis (IPF) and other pulmonary fibrotic conditions.

The deal called for New York-based BMS to pay an undisclosed up-front option fee, with the potential for an option closing fee and additional clinical and regulatory milestone payments. Although Galecto, of Copenhagen, Denmark, will continue to manage the early development program, the initial BMS payment will now fund that research, according to Hans Schambye, Galecto's CEO. The companies agreed on a preclinical data package and the phase I development plan, and BMS may exercise its option to purchase Galecto at any time but no later than 60 days following completion of the phase Ib trial, which Schambye expects to occur within the next two years.

After accruing strong preclinical data in animal models that confirmed the anti-fibrotic activity of TD139, Galecto began enrolling the randomized, double-blind, single-center, placebo-controlled, single-ascending dose phase I portion of a phase I/II study, which is under way in healthy volunteers. The randomized, double-blind, multicenter, placebo-controlled, multiple dose expansion cohort in IPF patients is expected to begin enrolling next year.

Galectin-3 is a protein that binds to carbohydrate structures in the body and plays a central role in various types of fibrosis. By targeting and inhibiting the protein's binding ability, galectin-3 inhibitors represent a promising approach to treat diseases such as IPF, a chronic, progressive lung disease characterized by severe tissue scarring.

Galecto's competitors – chiefly Galectin Therapeutics Inc., of Norcross, Ga., and La Jolla Pharmaceutical Co., of San Diego – are developing polymer-based drugs. Galecto, instead, took a small-molecule approach after studying the binding interactions between the protein and its native ligand. (See BioWorld Today, April 25, 2012.)

In addition to TD139, the company has backup galectin-3 inhibitors GAL-100 and GAL-200, which remain in discovery, according to Cortellis Competitive Intelligence, and small-molecule galectin modulators also in the discovery phase.

With limited therapeutic options and significant clinical need, IPF remains an indication of keen interest to investors, and Galecto had attracted a syndicate that includes Novo Seeds, MS Ventures, Sunstone Capital and SEED Capital. The group was prepared to fund development of TD139 until the company amassed sufficient data to engage in partnering discussions.

"We had had informal contacts with several companies that are active in the fibrosis space for almost two years, meeting at conferences and such," Schambye told BioWorld Today. "We've not been in a formal partnering process. Our base plan was to complete the ongoing phase I study and then start reaching out. This was very much BMS coming to us."

BMS spokesman Ken Dominski confirmed that, as part of its transition to a diversified specialty care pharma, in late 2013 BMS began targeting R&D resources toward "our most meaningful opportunities" and focusing on promising approaches that address areas of high unmet medical need, including fibrosis. Within that disease category, BMS is especially interested in potential treatments for IPF, chronic kidney disease and scleroderma.

The pharma found TD139 attractive for the opportunity to be "complementary or synergistic" with its own fibrosis candidates, including BMS-986020 (AM152), an orally available lysophosphatidic acid 1 receptor antagonist, now in phase II, that was gained in the 2011 acquisition of San Diego-based Amira Pharmaceuticals Inc. (See BioWorld Today, July 25, 2011.)

Initially, BMS was mostly interested in Galecto's lead compound, according to Schambye, "but we think our program stood out because it's an inhalable, with a huge potential for a better side-effect profile than current treatments," he said.

The option structure allows Galecto to continue running the TD139 development program essentially as planned, with concurrence from BMS. The pharma, meanwhile, will evaluate the potential for TD139 to accelerate its own program around the galectin-3 target.

Being approached by a pharma partner, instead of the other way around, is an enviable position for any small biotech, and "building a strong platform is the key," Schambye said. "We had the science, the team and the investors come together in a shared goal."

The other factor that provided Galecto with leverage in the deal was "not being for sale," Schambye maintained. "It's much more attractive to find a partner if you're not desperate."