Under the partnership, US-based Proteostasis will contribute its drug discovery technology - including novel targets and compounds that modulate key proteostasis network pathways - whilst Elan will provide animal models, biology, medicinal chemistry and clinical development services.
News of the agreement comes soon after the sale of Elan’s drug technology unit to US biotech firm Alkermes in a cash and stock deal worth $960m (€672m). At the time Elan said the sale would give it the freedom to pursue new interests.
Kelly Martin, CEO of Elan, said: “This initiative with Proteostasis reinforces our commitment and strategic business objective of being an exceptionally high-calibre, science-driven company and provides a multitude of opportunities for Elan to advance its position as a world leader in the broad field of neuroscience.”
The nature of the agreement means Elan will become a 24 per cent shareholder in Proteostasis, with first refusal on exclusive licensing rights for any new compounds.
Access to board
As part of the deal, Elan has agreed to provide Proteostasis with research funding support of up to $30m (€21m) over the next five years. In return, the company will gain seats on Proteostasis’s board of directors, and its scientific advisory board.
“Given the construct of the deal as a capital investment,” said Martin, “this transaction is being consummated in a manner that will have a minimal near-term financial impact on our income statement and enable shareholders to realise the benefits of the operating leverage embedded into our business.”
Christopher Mirabelli, chairman of the board of Proteostasis, echoed Martin’s comments, saying: “This alliance provides a creative approach to financing our discovery platform and supporting the development of multiple discovery and development programmes in parallel.”
According to Proteostasis, its drug platform is based on the concept that perturbations in proteostasis network pathways underlie a variety of diseases, including neurodegenerative diseases and orphan conditions, such as cystic fibrosis and lysomal storage disorders.
The company is currently working to develop a class of small molecule therapeutics called proteostasis regulators (PRs), to treat neurodegenerative, metabolic, genetic and inflammatory disorders. The candidates are designed to restore proper protein function or remove misfolded and aggregated protein.
In April, it acquired two exclusive licenses from Harvard University for technologies which enhance the activity of the ubiquitin-proteasome pathway involved in protein clearance.
Proteostasis said it hoped these acquired technologies, including novel targets and small molecule compounds, will help in the development of new therapeutics for its latest partnership with Elan.