Constellation inks $95M discovery deal, buyout option with Genentech

Epigenetics is a new field in drug discovery. But one of the pioneers of the science has already struck a lucrative partnership pact with Roche's Genentech that could pave the way to a buyout. Constellation Pharmaceuticals--a 2008 Fierce 15 upstart originally operated by Third Rock's Mark Levin--said this morning that it has struck a deal to collaborate with Genentech on new epigenetic drug programs, earning $95 million in an upfront fee and committed research payments over a three-year period.

For now, Cambridge, MA-based Constellation will continue to stay in charge of its two lead in-house programs, able to earn "substantial" but undefined development and commercial milestones on any successful efforts it undertakes with Genentech. And Genentech now has the right to gobble up Constellation whole, including its two programs, if the company likes what it sees.

Constellation CEO Mark Goldsmith tells FierceBiotech that the developer plans to have its first lead program in the clinic by the end of this year, giving the company its own options in the event the new Genentech relationship doesn't end in marriage. Goldsmith is staying mum about a number of items in the deal, though, including how much Genentech would pay if it goes ahead with an acquisition. But it amounts to a potentially "highly attractive return" for the investors.

A big return would require the kind of cash reserves that Genentech can call on. Constellation brought its total venture haul to $70 million with last summer's B round, which came from Third Rock Ventures, The Column Group, Venrock Associates, SR One and Altitude Life Science Ventures. Well funded, it's been growing its staff rapidly over the past three years. Today's announcement also contributes to a strong early endorsement of its strategy to approach epigenetics from a more "holistic" standpoint, focusing on three different types of enzyme targets that play a role in switching genes on and off and earning a reputation for its expertise in chromatin biology along the way.

Constellation's science related to a variety of disease categories, but it has primarily concentrated on cancer. One of its lead programs is focused on EZH2, which is also a hot topic at cross-town rival Epizyme.

- here's the press release

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