Sanofi ($SNY) has stepped up with a $45 million down payment on a potential $200 million early-stage deal to develop new drugs for heart muscle disease. The pharma giant inked one if its rare small-biotech collaboration pacts with MyoKardia, a South San Francisco-based biotech that was funded by Third Rock a couple of years ago.
Now MyoKardia will take the lead on the work through early human efficacy data, with Sanofi offering financial support through 2018.
The $200 million deal--which involves milestones, an equity investment and research support--covers three MyoKardia programs; two for hypertrophic cardiopathy and one for dilated cardiomyopathy. Pushing ahead past proof-of-concept work in humans, the two partners plan to split the development costs on the hypertrophic work with Sanofi paying the full freight on the third dilated cardiomyopathy program.
MyoKardia filed a Form D with the SEC a few weeks ago outlining a $10 million raise. CEO Tassos Gianakakos confirmed that that was Sanofi's equity stake, with the rest of the initial round of cash coming in an upfront. The full deal positions the biotech to achieve its full 5-year vision for the company, says the CEO, who joined MyoKardia a year ago.
In many ways, MyoKardia is a classic Third Rock creation. Helmed initially by Charles Homcy, a partner in the venture group, it gathered together some marquee scientific talent to go after the root causes of hypertrophic and dilated cardiomyopathy, a condition that afflicts a million people in the U.S. The biotech set out to target personalized small-molecule treatments that can address protein mutations in the sarcomere--part of the heart muscle--for small "buckets" of patients. Third Rock provided a $38 million A round in 2012 to get the company off the launch pad.
Cardiovascular disease is a field dominated by giant pharmas which can afford to do the kind of huge late-stage studies needed to gain an approval for a large patient population. MyoKardia, though, is out to "break down heart failure into genetic subtypes," says the CEO--a rare disease approach that Sanofi's Genzyme used to build the company.
"We're doing something totally different. It's totally new," says Gianakakos. "We know exactly what is driving the disease."
The CEO added that the company has already built a staff of 45 and plans to add more researchers to the mix as it expands its efforts.
Sanofi is better known in the industry for its big R&D partnerships with the likes of Regeneron ($REGN) and Alnylam ($ALNY). This much smaller, early-stage pact is part of its "Sunrise initiative," which is aimed at licensing rights to very early-stage work. Sanofi joined hands on another Third Rock startup in 2012, when the pharma giant participated in the $125 million launch of Warp Drive Bio in Cambridge, MA.
"We're going to focus on really getting this relationship off to the right start," adds Gianakakos, emphasizing that the biotech remains in charge of the research during the first stage of the pact. "Financially, this partnership significantly derisks the company."
Special Report: Q3 biotech venture investing makes a boisterous leap - MyoKardia