Second Genome Inc. (SG) bagged an agreement with Gilead Sciences Inc. valued at potentially more than $1.5 billion, with $38 million up front in a pact that involves as many as five of Gilead’s pipeline compounds against inflammation, fibrosis and other diseases. The term sheet also includes efforts to identify potential new targets and candidates in inflammatory bowel disease (IBD).

South San Francisco-based SG will deploy its Microbiome Analytics Platform – designed to harness microbiome-related scientific insights to boost treatment effects by stratifying  patients – plus other discovery and development tools. The arrangement with Gilead, of Foster City, Calif., aims to come up with up to five new IBD targets or drug prospects over the next four years, and the collaboration could be stretched to another two years. Gilead has pledged as much as about $300 million if preclinical, clinical, regulatory and commercial milestones are met in each of the five target discovery programs, as well as low double-digit royalties for any approved products. More milestone-related payments are tied to each validated biomarker delivered. Gilead owns the option to worldwide rights for up to five programs for all diseases and exclusive rights to all biomarkers.

In SG’s pipeline for IBD is SG-2-0776, a therapeutic protein derived from the microbiome that promotes mucosal healing of damaged epithelial surfaces. Clinical development is expected to start next year. Although debate continues about the triggers for IBD, one idea is that the painful condition advances by way of a breakdown of intestinal barrier function that allows bacteria or bacterial components to translocate into mucosal tissue, which activates inflammatory signaling. That could lead to more barrier disruption, kicking off a cyclic amplification loop, SG said. At even earlier stages are other efforts in IBD as well as immuno-oncology.

The company has research ongoing in the central nervous system space, too. A project with the Stanford University School of Medicine and Oregon State University in March 2019 gained a two-year, $1.94 million phase II SBIR grant to develop a platform that would discover and validate key metabolites produced by microbes in autism spectrum disorders.

SG once was among the many players in nonalcoholic steatohepatitis. The oral small-molecule SGM-2019 in January 2019 entered a phase II trial. Rationale for the approach seemed solid, since SGM-2019 targeted the P2X7 receptor, known to be involved in inflammasome activation, but the study was terminated because of a safety event.