Evotec signs a Huntington's deal as diabetes project falls through

Risk-sharing researcher Evotec took a blow last week when partner Hyperion Therapeutics ($HPTX) pulled the plug on a diabetes trial, but the German company is keeping things moving, expanding an agreement that will put it to work on treatments for Huntington's disease.

The new deal, with private researcher CHDI Foundation, will fund Evotec's work on the neurodegenerative disease through 2017, paying the way of as many as 52 full-time scientists, the company said. The two first got together in 2006 to work on discovery-stage projects in neuroscience, and Evotec touts CHDI's latest expansion as affirmation of its expertise and platform technology.

"Evotec represents one of our largest and longest standing relationships and continues to be an important strategic partner in our search for effective treatments for Huntington's disease," CHDI Chief Scientific Officer Robert Pacifici said in a statement. "Their integrated drug discovery capabilities are helping us to discover novel targets and to advance drug candidates towards the clinic, and we look forward to continuing to work with Evotec over the coming years."

Meanwhile, the Hamburg-headquartered CRO is moving on from the unforeseen halt of Diapep277, a diabetes treatment for which it held royalty rights. The drug was the top prospect of Israel's Andromeda Biotech when Hyperion Therapeutics agreed to pay up to $570 million for it earlier this year. Last week, however, Hyperion halted development after discovering that Andromeda employees had manipulated trial data related to the drug. That freezes out any potential royalty revenue for Evotec, and the company said it's still owed more than $4 million tied to the project.

Evotec splits its business into two halves: EVT Execute, which operates like a CRO, and EVT Innovate, which out-licenses internally developed candidates. The former half largely pays the bills, thanks to risk-sharing deals with the likes of Bayer, Johnson & Johnson ($JNJ) and Roche ($RHHBY), but Evotec has taken strides to build up its internal efforts, in March buying up a biopharma asset management company to bring in a pipeline of its own and get to work on some unpartnered assets.

- read the statement