Ligand Pharmaceuticals is trading its Vernalis research operations over to Chinese drug discovery biotech HitGen for $25 million in cash.
The San Diego-based Ligand first acquired the Cambridge, U.K. company two years ago this month, for its work in applying biophysics and molecular modeling towards the generation of new potential drug compounds.
But since then it has completed four separate U.S.-based acquisitions focused in antibody discovery and protein expression—and said now’s the time to divest its holdings across the pond.
“This transaction with HitGen represents an attractive return on our purchase of Vernalis in October 2018, while we maintain economic rights to the promising partnerships that initially attracted us to Vernalis, including with Verona and Corvus,” said John Higgins, CEO of Ligand, which had paid $42.3 million for the company, minus about $32 million from Vernalis’ net cash on hand following the deal.
In total, Ligand will walk away with a portfolio of eight partnered programs, including ensifentrine (RPL554), in phase 3 development for chronic obstructive pulmonary disease with Verona Pharma, and ciforadenant (CPI-444), an adenosine A2A receptor antagonist in phase 1b/2 with Corvus Pharmaceuticals for various cancers. It also maintains the rights to a phase 1/2 HSP90 inhibitor that it says has the potential to treat COVID-19.
The Chengdu-based HitGen, meanwhile, will gain a foothold in Cambridge’s biopharma hub through Vernalis’ 80 employees, and plans to use the company as a platform for further investments and expansion in the U.K. and Europe.
“I have long been impressed by the achievement, experience, and stability of the Vernalis team,” said HitGen’s founder, chairman and CEO, Jin Li. “This strategic acquisition represents HitGen’s continuing investment at the frontier of innovative drug discovery; establishing a more effective technology platform to address unmet clinical needs by developing better, faster and smarter medicines.”
Vernalis will continue to operate under its current management, and will maintain its collaborations with Asahi Kasei Pharma, Lundbeck, Servier and PhoreMost. HitGen also expects to see synergies between its DNA-encoded chemical libraries, containing over 500 billion small molecules, and Vernalis’ fragment- and structure-based approaches to medicinal chemistry and drug discovery. The deal is expected to close before the end of the year.