UPDATED: Celgene snaps up Avila Therapeutics in $925M buyout

In less than five years Avila Therapeutics nailed down a reputation as an exciting developer of covalent drugs, with a lead Btk inhibitor for cancer garnering attention at a very early stage of development. Today it turned that excitement into a $925 million buyout deal with Celgene ($CELG), with $350 million of that coming in cash.

The jewel in Avila's crown is AVL-292, a Btk inhibitor now in Phase I. The dealmakers involved in the buyout snagged a $195 million commitment for milestones leading up to a potential approval for that program. And Celgene will add the Avilomics platform to its R&D division, with another $380 million in back-end payments for the progress of other drug candidates that spring off the platform.

The Bedford, MA-based biotech was named a Fierce 15 company back in 2010, not long after the company garnered its last venture round of $30 million. Avila has been recognized for its novel approach to protein silencing, with much of the attention centered on its lead therapy for B cell cancers. The developer also has two candidates for hepatitis C--AVL-181 and AVL-192 targeting the NS3 protein--believing that its ability to create better bonds can deliver a best-in-class drug for one of the world's hottest disease categories.

Avila--which was co-founded by Juswinder Singh, who earlier led the computational chemistry efforts at Biogen Idec ($BIIB)--has development deals in place with Clovis as well as the Novartis Option Fund. The fund led the last round, with help from Abingworth, Advent Venture Partners, Atlas Venture and Polaris, which are all counting their returns this morning. Katrine Bosley, the CEO, gets much of the credit for building the value of the company.

Atlas Venture's Bruce Booth heralded the deal in a blog post this morning, noting that Avila raised a total of $51 million over five years, giving investors a 5x return in a timely fashion, with a potential 15x on the backside. By anyone's calculations, that's a coup.

In baseball parlance, the deal was a "grand slam," says Mike Bigham, the founding CEO and partner at Abingworth, where Avila was initially incubated. For Bigham, whose firm also invested in Micromet and scored a payout late last year with Takeda's buyout of Intellikine, the deals help underscore that "M&A has increasingly become the preferred exit pathway for young companies."

Avila was Bigham's third startup, after Gilead and Coulter. And each provided a compelling story on their technological approach to drug development while fielding a strong team of senior executives early on. "I'm a big believer in hiring talented senior people early in a company," says Bigham. "It's a way of turnocharging a company early on."

"Celgene and Avila are uniquely matched, both strategically and scientifically," said Bosley. "Celgene's global leadership in hematology and emerging franchise in immune-inflammatory diseases will accelerate and expand the clinical development of our Btk inhibitor program. Equally important, we value the high standards of creativity and rigor of Celgene's scientists. We believe working together may accelerate the advancement of more innovative medicines from the Avilomics platform."

- here's the press release

Special Report: Celgene - Biotech's Biggest Spenders 2011

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