Eli Lilly and Co.’s definitive agreement to acquire privately held Disarm Therapeutics Inc. brings Cambridge, Mass.-based Disarm $135 million up front and as much as $1.225 billion in additional future payments for potential development, regulatory and commercial milestones if Lilly successfully develops and commercializes therapies tied to the agreement.

The deal brings Lilly SARM1 inhibitors, which the company said it will continue to develop for treating peripheral neuropathy and other neurological diseases such as amyotrophic lateral sclerosis and multiple sclerosis (MS). SARM1 is part of a fundamental pathway driving axonal degeneration. The inhibitors, created to prevent axon loss, are in preclinical development. Mark Mintun, Lilly’s vice president of pain and neurodegeneration research, said the company made the acquisition as part of its search for “medicines to treat the debilitating pain and loss of function associated with nerve damage."

Disarm's scientific co-founders, Jeffrey Milbrandt and Aaron DiAntonio of Washington University in St. Louis, reported in the March 2017 issue of Neuron that the SARM1 protein possesses an enzymatic activity that centrally drives axonal degeneration.

The company enrolled the first participant in the Epiphany prospective observational study in September 2019. Epiphany is designed to characterize the course of chemotherapy-induced peripheral neuropathy and its associated biomarkers in breast cancer patients receiving paclitaxel or docetaxel or in lymphoma patients receiving vincristine. The primary outcome measure is the percentage change in neurofilament light from baseline to up to six months after the last dose of chemotherapy. Enrolling approximately 200 patients was expected to take about a year, with the study anticipated to wrap up in June 2021.

In October, Disarm reported preclinical data at the Society for Neuroscience meeting in Chicago showing small-molecule inhibitors of SARM1 protect axons in both in vitro and in vivo models of axonal degeneration. Protection from axonal degeneration was measured using neurofilament light chain, a downstream biomarker of axonal degeneration that can be detected in blood.

Just before launching the Epiphany study, Disarm scientists described the crystal structure of two SARM1 protein domains, the sterile alpha motif and the Toll/interleukin-1 receptor (TIR) in Science. Milbrandt and DiAntonio, concurrent with the Science paper, reported that the TIR domain is a critical member of an evolutionarily conserved family of NAD+-cleaving enzymes whose function is essential for innate immune signaling and the cell death response in plants.

Further preclinical data from Disarm demonstrated that deleting SARM1 has a robust axonal-protective effect in experimental autoimmune encephalomyelitis (EAE), a well-accepted animal model of MS. Data from the EAE model showed SARM1 homozygous and heterozygous gene deletion markedly attenuates the increase in plasma neurofilament light, a biomarker of axonal degeneration and disease progression in MS. The magnitude of SARM1 effect on neurofilament light was gene-dosage dependent. Axonal protection through SARM1 deletion led to a statistically significant reduction in demyelination via histological examination.

In 2017, Disarm’s shortlist of disease target candidates included MS, amyotrophic lateral sclerosis, glaucoma, chemotherapy-induced peripheral neuropathy and Charcot-Marie-Tooth disease, one of the most common inherited neurological disorders, affecting about one in 2,500 people in the U.S.

Commercial activity in the SARM1 space so far appears to be minimal, with Disarm and Nura Bio Inc. the only companies to publicly disclose work to develop medicines targeting the enzyme. In late July, Nura closed on a $73 million series A.

Disarm raised $30 million in its series A financing in September 2017. The charge was led by Atlas Venture, with co-investors Lightstone Ventures and Abbvie Ventures. In January, the company appeared to be readying to raise more, with the hiring of Scott Holmes as chief financial officer, who had previously held that role at Kiadis Pharma NV.

Lilly said the acquisition will not change its 2020 generally accepted accounting principles earnings per share guidance.

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