The study of arginine residue on proteins at Scripps Research Institute – a "pretty arcane" and "obscure" research area – that led to the forming of Padlock Therapeutics Inc. laid the foundation for Bristol-Myers Squibb Co.'s (BMS) $600 million buyout, Padlock CEO Michael Gilman told BioWorld Today. "A lot of unrelated strands of research sort of came together in a way that [we] looked at it and said, 'Aha, I think I know what's going on here,'" he said.

New York-based BMS is paying near-term, contingent milestone rewards of up to $225 million and as much as $375 million more if development and regulatory goals are met with the protein/peptidyl arginine deiminase (PAD) enzyme inhibitor discovery program for rheumatoid arthritis (RA), which may also find utility against lupus and other autoimmune diseases. The deal is expected to close during the second quarter of this year.

With Orencia (abatacept) already approved in RA, BMS was especially interested in the idea that compounds developed with the PAD technology could function "very nicely in combination with existing immunomodulatory drugs because they work orthogonally," Gilman said. "They don't mess with the immune system directly. Instead, they get rid of the stuff the immune system is reacting to. There is a ton of unmet need, still, and scientifically RA is really where the strongest case can be made for the importance of these enzymes in disease," he said.

"Three-quarters of RA patients are making antibodies to citrillunated proteins, which are proteins that have been modified by PAD enzymes," and the presence of the antibodies is 98 percent specific for RA. If the antibodies turn up, "you either have RA or you're going to get it," he said. "It turns out this [finding] is right in the middle of all of these autoimmune diseases, which I don't think anyone initially appreciated."

The antibodies "develop very early – in fact, years before patients actually develop clinical symptoms," Gilman said. "If you had a drug that blocked these enzymes and prevented the production of these antigens, there's an expectation that you could intervene very early, even perhaps before people develop severe symptoms, and really make a huge difference in the evolution of the disease in ways that today's medicines don't. That's the value proposition."

It's been known for 70 years that RA patients make unusual antibodies that healthy people don't. First to appear on the radar screen was rheumatoid factor, "an antibody to antibodies," Gilman said. "That became a diagnostic test for RA. But it's really only 65 - 70 percent specific. People continued to look for antibodies that were better predictors of the presence of RA."

Eventually, anti-perinuclear factor was discovered, a much more telling marker. "Over the next 20 years, people figured out that the antibody was reacting to these citrullinated proteins," he said.

Gilman, an Atlas Venture partner, co-founded Padlock with scientists Paul Thompson, professor and the director of chemical biology at the University of Massachusetts Medical School in Worcester, and Kerri Mowen, a researcher at Scripps. Seed funding from Atlas let Padlock begin a collaboration with Evotec AG, of Hamburg, Germany, which provided a range of research activities and expertise, including in vitro biology, high-throughput screening, structural biology, medicinal and computational chemistry and drug metabolism/pharmacokinetics.

The company didn't start making noise until the J.P. Morgan Healthcare Conference in January 2015. "We met with 20 different pharma companies, including BMS," Gilman said. "We stayed in contact with them, throughout the whole period of time. It was another party coming to us with a deal proposal that got the whole thing heated up," and the firm found itself negotiating with a "bunch" of players, he said. "It's been a very intense few months for us." (See BioWorld Today, Jan. 16, 2015.)

As talks went on, "and particularly as we started to engage in partnering discussions with various pharma companies, we quickly discovered that the ones working in RA were very familiar with this [PAD] story," Gilman said. "In many cases, they had run small-molecule screens of their own and just didn't get anything progressable." The program has reached the advanced preclinical stage. It's for BMS to decide when clinical experiments will start, but "had we been doing this ourselves, our plan was to be in the clinic by the end of next year," he said. "They're going to drive up a truck and collect all their chemistry and make their own calls, but this is the path we were on."

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