Italian pharma Zambon takes in Breath Therapeutics through €500M deal

With co-headquarters in San Francisco and Munich, Germany, Breath has been a portfolio company of the European venture firm Sofinnova Partners for the past two-and-a-half years. (Kritchanut/iStock/Getty Images Plus/Getty Images)

The Italian drugmaker Zambon has bought up Breath Therapeutics, developer of a custom inhaled drug delivery platform, in a deal worth up to €500 million, or about $558.7 million U.S.

The acquisition, with its €140 million upfront payment, also includes Breath’s lead therapeutic candidate L-CsA-i, a novel formulation of cyclosporine A. The immunosuppressive drug is currently being studied in two phase 3 trials for bronchiolitis obliterans syndrome, a potentially fatal orphan disease that occurs following a lung transplant.

Breath’s combination drug-device platform employs freeze-dried liposomes to carry cyclosporine into the body, by sandwiching the insoluble drug’s molecules within the boundaries of the phospholipid bilayer itself. It also uses an investigational eFlow nebulizer developed by PARI Pharma.

In a statement (PDF), Zambon CEO Roberto Tascione described the deal as the largest in the company’s history, and one that complements its pipeline in rare diseases and specialties, such as Parkinson’s and cystic fibrosis, as well as its work in respiratory, pain and women’s care.

“Bronchiolitis obliterans syndrome is an incredibly debilitating condition,” Tascione said of the autoimmune disease, which is estimated to affect over 30,000 people. “Through the combination of our geographic footprint, R&D infrastructure and relationships with the scientific communities, we are well-positioned to accelerate the development of an important new potential treatment.”

With co-headquarters in San Francisco and Munich, Germany, Breath has been a portfolio company of the European venture firm Sofinnova Partners for the past two and a half years.

“Breath Therapeutics is a perfect symbol of our investment strategy: cutting-edge platform and products developed by brilliant entrepreneurs for a debilitating disease with no effective treatment,” said Sofinnova managing partner Graziano Seghezzi, who also serves on Breath’s board of directors. “We had a clear vision in mind for a transatlantic operation with strong bases in Europe and in the U.S. to maximize the commercial opportunity.”

Sofinnova co-led Breath’s €43.5 million series A round in 2017, alongside Gimv.

“The potential impact of Breath Therapeutics and the drug was apparent to us at an early stage, since lung diseases are unfortunately becoming more common at a dramatic rate—especially due to environmental factors and changing lifestyle habits,” said Gimv partner Karl Nägler. “Breath Therapeutics—with the help of Zambon—is well-positioned for successfully further developing and marketing the product in the future and expanding into new fields of application.”

Zambon said it expects data from the L-CsA-i trials in 2021, and hopes to commercialize the drug by 2023 following FDA and European regulatory approvals.

Meanwhile, the drugmaker also recently received fast track and qualified infectious disease product designations from the FDA for its colistimethate sodium powder nebulizer solution, an inhaled treatment to help prevent lung exacerbations in patients with non-cystic fibrosis bronchiectasis and Pseudomonas aeruginosa infections.