Lundbeck is paying €100 million ($123 million) up front to buy Prexton Therapeutics and its midphase Parkinson’s disease candidate. The takeover gives Lundbeck control of an mGluR4 positive allosteric modulator designed to improve the long-term symptom control of dopaminergic agents.
To land Prexton, Lundbeck is handing over €100 million upfront and committing to up to €805 million in milestones tied to clinical, regulatory and commercial successes.
In return, Lundbeck gets to add foliglurax, Prexton’s only asset, to its pipeline. Prexton advanced the drug into phase 2 in the belief modulation of mGluR4 will control Parkinson’s symptoms better than just targeting dopaminergic pathways with drugs such as levodopa, the efficacy of which wanes over time as dopamine-producing nerve cells die.
Prexton thinks foliglurax may reduce the “off” times when levodopa is unable to control symptoms and help manage levodopa-induced dyskinesia. A 165-person phase 2 trial designed to generate data to support the off-time hypothesis is underway in Europe but it will be 12 months or so before top-line results are available. In the absence of clinical evidence of efficacy, Prexton has relied on a sizable package of primate data to make its case to investors and potential acquirers.
The preclinical data proved compelling enough to attract €29 million in series B funding last year, and to get Lundbeck to sign on the dotted line. But Prexton got a different reaction from the top 10 to 15 pharma companies when it presented its data in pursuit of a deal about one year ago.
“From Big Pharma, the message was that CNS ... is an extremely risky field. Because of that, they all said 'that's extremely interesting and encouraging but we want to wait for the outcome of the phase 2'. We can't take the risk,” Prexton CEO François Conquet said.
Mid-sized players, such as Lundbeck, would also rather have seen phase 2 data but knew a positive outcome in the trial would lure larger rivals to the deal table, driving up the price. Prexton faced a related dilemma about whether to sell up now or risk holding on for phase 2 data that could cause its value to surge or sink.
In the end, Lundbeck and Prexton agreed on a back-loaded deal that ensures the Danish pharma gets the asset and secures a guaranteed payday for the biotech’s backers, with the prospect of more to come if foliglurax succeeds. For Forbion, which co-led the series B, the deal represents an early validation of its decision to expand into the CNS sector.
Prexton rounded up the series B funds four years after it rose out of the shuttering of Merck Serono’s R&D site in Geneva, Switzerland with seed cash from its parent company and an mGluR4 program. A subsequent €8.7 million series A round equipped Prexton to take its lead drug into the clinic, and the data from the resulting phase 1 trial and preclinical package enabled it to pull in the series B funding 13 months ago.
That round gave Prexton the financial muscle to take foliglurax into two phase 2 trials, one focused on the U.S., another targeting Europe. But in the end the biotech chose to focus on the European trial. Reflecting Prexton’s desire to generate data strong enough to land it a buyout, the trial of two doses of foliglurax is bigger than the simple proof-of-concept studies typically run at that stage.