Atlas' Padlock scoops up some GlaxoSmithKline assets in autoimmunity

Padlock Therapeutics CEO Michael Gilman

Padlock Therapeutics, an Atlas Venture-seeded biotech startup, grabbed the rights to some potential drugs developed by GlaxoSmithKline ($GSK), widening its arsenal of assets as it chases a novel approach to autoimmune disease.

Under the agreement, Padlock gets some intellectual property and an undisclosed number of candidates that target protein-arginine deiminases, or PADs. In exchange, GSK gets an unspecified equity grant and the right to send an observer to Padlock's board meetings. The biotech isn't handing over any licenses to its proprietary technology, and it doesn't owe GSK any royalties down the line.

The big idea at Padlock is to craft chemicals that block PAD enzymes in an effort to stem the production of agents that set off the immune system's alarms. PADs play an active role in transforming the amino acid arginine into citrulline, which triggers the body's natural defenses in diseases like rheumatoid arthritis (RA). By interrupting the activity of PADs, Padlock hopes to cut out the offending antigens without suppressing the immune system.

Thanks to a $23 million A round closed in December, Padlock is at work on PAD-blocking approaches to RA, lupus and multiple sclerosis, hoping to craft new treatments that could complement or exceed what's already on the market. The funds should carry Padlock through preclinical development for its first drug candidate, CEO Michael Gilman has said.

And now, adding more IP and shots on goal courtesy of GSK, Padlock believes it's fleshing out a winning approach to autoimmunity.

"We are thrilled to add GSK's assets and know-how to our platform," Gilman said in a statement. "We believe that the compounds, methods and data obtained from GSK, combined with our own internal expertise and proprietary chemistry, create an industry-leading R&D effort focused on the PAD enzymes and will expedite getting PAD-directed medicines to patients with serious autoimmune diseases."

Meanwhile, the in-transition GSK has been shedding assets amid a top-down effort to more efficiently run its business. The U.K. giant has cut deep into its stateside R&D operation, slashing payroll and relying more and more on contractors, all while steering clear of the big-ticket buyouts and licensing deals that have widened the pipelines of its competitors in recent years. Andrew Witty, the company's embattled CEO, has repeatedly preached patience as GSK works through a complicated asset swap with Novartis ($NVS), but many analysts and investors are agitating for his ouster after years of disappointing results.

- read the statement