In a high-stakes game for both companies, Shionogi is doubling down on its Tetra Therapeutics R&D deal with a buyout option wedded to key data coming out this month.
The pair’s original pact was penned back in late 2018 and saw Tetra team up with Shionogi to advance its PDE4-targeting drug in Alzheimer’s disease (AD) and fragile X syndrome.
In return for the rights to the drug in three Asian countries, Shionogi handed over a $5 million upfront with $35 million in equity. Tetra could also gain up to $120 million in development and commercial milestones.
The $40 million was designed to allow Grand Rapids, Michigan-based Tetra to complete its ongoing phase 2 trial in fragile X and to kick off another phase 2 trial in early AD in 2019.
That candidate, BPN14770, nicknamed ‘770, is a selective allosteric inhibitor of the enzyme phosphodiesterase-4D, or PDE4D. Tetra is also developing it for brain disorders characterized by cognitive and memory deficits including dementias, schizophrenia, major depression and learning disabilities.
Now, Shionogi is doubling down on the pact as that phase 2 in AD comes to the fore: The biopharma is boosting its equity investment in the company up to 50% and has penned in a buyout option for the biotech “if certain closing conditions are met.”
Specifically, this rests on the topline results of the company’s midstage PICASSO trial in patients with early AD, which are expected to read out later this month.
“This expanded alliance with Shionogi further validates our platform and the potential for BPN14770 to provide a new treatment option for patients suffering from Alzheimer’s disease,” said Mark Gurney, Ph.D., chair and chief at Tetra.
“We are delighted to be expanding our collaboration with Shionogi and thank them for their continued conviction in our mission. We look forward to announcing topline results from our phase 2 PICASSO AD trial in Alzheimer’s disease later this month.”
Given that nearly every AD effort has failed over the past 15 years, this looks like a very risky bet. But the companies are hoping ‘770 can buck that trend, given it does not rely on amyloid plaques, the target the majority of Alzheimer’s research has relied on but that hasn’t turned up a new treatment in more than a decade.
Instead, it works as an inhibitor of PDE4D, which is just one of four PDE4 enzymes in the human genome, three of which are expressed in the brain. Several marketed drugs inhibit PDE4, with most of them targeting skin diseases—these include Otezla for psoriasis and Eucrisa for eczema.
Early-stage data suggest it can also work to enhance memory formation, with preclinical results showing it can help promote the maturation of connections between neurons, which are impaired in patients with fragile X syndrome, and protect connections between neurons which otherwise are lost in patients with AD.
Phase 1 done, with a focus on safety and dosing, this phase 2 is the real test, both for the drug and the biotech’s future. We will have to watch this space to see whether it can past muster.