Back in January of 2012, Third Rock's upstart epigenetics play Constellation Pharmaceuticals landed a three-year deal with a marquee development partner. Genentech agreed to step in, provided a cash commitment of $95 million to cover part of the Cambridge, MA-based biotech's R&D overhead, and added an option to buy the company. Now the collaboration part of the deal is complete, and on Friday the biotech quietly laid off 23 staffers as it sketched out a path that would allow it to go it alone--if Genentech doesn't acquire the company by its deadline later this year.
|Constellation CEO Keith Dionne|
"The collaboration came to an end this month," says Constellation CEO Keith Dionne, who confirmed the layoffs after a query from FierceBiotech. "Genentech chose three targets for exclusive development, with milestones and royalties going forward."
Dionne isn't saying right now just what those milestones and royalties could be worth to the biotech. Genentech's deal team has been reluctant to publicly review various terms so it "won't have to compete with itself," he adds, as it inks a growing number of deals. He also isn't saying just when Genentech's buyout option ends, other than to note that it's a clinical development point that is coming along later in 2015.
"Genentech will either acquire us, or not," says the CEO. "What we're planning with this reorganization is our independent future path if Genentech does not." Dionne adds that Constellation is still keeping about half of the staff that had been devoted to the Genentech collaboration, leaving the biotech with a still hefty set of 55 staffers.
In the meantime, the company is pursuing three Phase I studies for its lead program, CPI-0610, for lymphoma, leukemia and multiple myeloma while looking to get its second program--targeting EZH2--into the clinic later this year. Once Phase I is wrapped, Constellation will be positioned to take any of the three cancer targets into Phase II. It will also be free to set up other collaborations if Genentech steps away.
Constellation is working at an R&D crossroads that has attracted major league attention in the cancer arena. The big idea here is centered on developing small molecules that can inhibit the bromodomain and extra-terminal (BET) family of proteins that remodel the chromatin structure, a target for cancer and inflammation, though Constellation has been primarily focused on oncology. The biotech also partnered with the Leukemia & Lymphoma Society, which committed $7.5 million not long after Genentech stepped in. And it has reported $70 million in venture backing from Third Rock, which founded the 2008 Fierce 15 company, along with The Column Group, Venrock Associates, SR One and Altitude Life Science Ventures.
Epigenetics seized the attention of drug developers intrigued by the notion that it offered a mechanism for switching genes off and on--an avenue for new cancer drug research. A better understanding of epigenetics also inspired the launch of Epizyme ($EPZM).
Special Report: 2008 Fierce 15 - Constellation Pharma