Struggling Eleven Bio cashes out of 2nd drug in $270M Roche deal

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Faced with back-to-back pivotal flops for its lead drug, Eleven Biotherapeutics has now outlicensed the second drug in its limited pipeline to Roche.

Roche ($RHHBY) has stepped in with a $7.5 million upfront, a promise of another $22.5 million for an FDA acceptance of an IND and up to $240 million in future milestones for global rights to Eleven's preclinical IL-6 drug EBI-031 and all related IP around it. The drug is designed to treat ocular diseases.

Eleven’s shares ($EBIO) surged 77% on the sight of nondilutive cash.

Eleven, though, loses $2.5 million of that first milestone if the IND is not accepted by the agency on or before September 15. And to help hurry things along, the biotech announced that it had filed the IND this morning.

Cambridge, MA-based Eleven found itself in a world of hurt when EBI-005 (isunakinra)--an IL-1 receptor inhibitor--flunked a Phase III study for dry eye disease back in May of last year. But the biotech managed to rally investors for another charge into a separate Phase III trial to study the drug's impact on allergic conjunctivitis. That study also failed, leaving few if any options for going forward.

“As previously announced, we also continue to evaluate additional strategic alternatives with a goal to maximize shareholder value,” noted Eleven CEO Abbie Celniker in today’s statement. According to the biotech’s web page, the only other asset at Eleven is a VEGF pathway inhibitor now in discovery, begging the obvious question about a wind-down and exit, with a reverse merger awaiting another company looking to get onto the public market.

- here's the statement