Evotec extends a biotech deal with $13M on the line

Evotec, a risk-sharing R&D collaborator, has extended its relationship with biotech startup Padlock Therapeutics, inking a new deal that will see the pair progress into preclinical development.

Padlock, developing a novel approach to autoimmune disease, first reached out to Evotec last year, tapping the German company's molecule library and biology expertise. The two have now entered a second phase of their partnership, stretching through 2017 with hopes of delivering multiple drug candidates. Evotec is in line for up to $13 million in milestone payments, the company said.

Founded last year by Atlas Venture, Padlock is at work on treatments that promise to stem the production of agents that set off the immune system's alarms in the first place, blocking enzymes called protein-arginine deiminases, or PADs. The enzymes play an active role in transforming the amino acid arginine into citrulline, which triggers the body's natural defenses in diseases like rheumatoid arthritis. By interrupting the activity of PADs, Padlock hopes to cut out the offending proteins without suppressing the immune system.

"We are excited to continue collaborating with Padlock," Chief Operating Officer Mario Polywka said in a statement. "This collaboration highlights how Evotec's integrated drug discovery platform provides a unique complement to Padlock's innovative approach to this target class and associated therapeutic area. We look forward to mutual success over the coming years."

Meanwhile, Evotec is looking forward to a big year as it prepares to sign an expansive deal with Sanofi ($SNY) in which the drugmaker will invest at least €250 million ($310 million) over 5 years in Evotec, handing over a French research site and forging deep R&D ties with the company.

Evotec, which makes its money sharing the risks and rewards of research with its partners, just pocketed €8 million ($10 million) from its ongoing R&D collaborations with Bayer and Johnson & Johnson ($JNJ), and it's forecasting growth for 2015.

The company splits its business into two halves: EVT Execute, which operates like a CRO, and EVT Innovate, which outlicenses internally developed candidates. The former half largely pays the bills, thanks to risk-sharing deals with the likes of Boehringer Ingelheim and Roche ($RHHBY), but Evotec has taken strides to build up its internal efforts through acquisitions and licensing agreements.

- read the statement

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