Roche picks up a new autoimmune drug with $580M Adheron deal

Roche ($RHHBY) is investing in an early-stage project that takes a novel approach to treating autoimmune diseases, agreeing to pay up to $580 million for California's Adheron Therapeutics.

Under the deal, Roche is trading $105 million up front for the company and its lead drug, an antibody designed to interrupt the immune system's misguided attacks on the body. The Swiss pharma giant has promised as much as $475 million more tied to developmental milestones in a deal both companies expect to close soon.

Adheron's top prospect is SDP051, which targets a protein called cadherin-11 that acts as an adhesive between cells, the company said. Cadherin-11 is key to the process by which immune cells stick to their targets, and it's expressed in connective tissues in the skin and lungs, where errant T cell attacks lead to joint destruction and fibrosis. Adheron believes the injected treatment could become a novel therapy for both rheumatoid arthritis and fibrotic disease.

SDP051 completed a Phase I trial in healthy volunteers last year, proving itself safe and well tolerated, Adheron said. The company has since mapped out plans to test a monthly dose of the antibody in Phase II.

In Roche, Adheron now has a partner with deep experience in autoimmune diseases, with the blockbuster arthritis treatment Rituxan to its name and a pipeline of early-stage drugs in the same field. And in fibrotic disease, Roche made a splash last year with an $8.3 billion buyout of Intermune and its now-approved treatment for idiopathic pulmonary fibrosis.

"This deal brings together Adheron's deep understanding of the underlying science of Cadherin-11 with Roche's vast experience in researching and developing next-generation medicines," Adheron CEO Hari Kumar said in a statement.

The biotech company grew out of research from Brigham and Women's Hospital and Harvard Medical School, where investigators zeroed in on cadherin-11's role in the immune process. Both Kumar and Chairman Bob Baltera are veterans of Amira Pharmaceuticals, bought in 2011 by Bristol-Myers Squibb ($BMY) in a deal worth up to $475 million. Adheron's investor syndicate includes Health Care Ventures, MedImmune Ventures, Partners Innovation Fund, Amgen Ventures and SROne.

- read the statement

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