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The CEO of Biotech turned the failed Sanofi drug into a multi-million dollar offer

In April 2016, John Hood went and told his wife that he had spent a quarter of a million dollars of his money to try to buy a drug he had helped invent, after he had failed at the hands of the French pharmaceutical company Sanofi. .

There was a trap: Hood had 120 days to find $ 5 million more to close the deal. If you did not, your initial payment will be lost. "Are you angry with me?" He asked.

Hood received the money from the venture capital firm Medicxi Ventures Inc., his wife was not angry, and on Sunday, almost two years later, Celgene Corp. announced a deal to buy the company from Hood Impact Biomedicines Inc. and the drug for $ 1.1 billion in cash. Future incentive payments could make the agreement worth as much as $ 7 billion.

While Hood regained his initial investment when Medicxi intervened, he maintained a "large stake" in the company, he said. He refused to share details, saying the amount is "enough where he would not like to answer the question."

The agreement with Celgene met for more than 18 days of insomnia, Hood said, after an initial contact in October. Among the most difficult decisions was whether Impact should have kept The drug is being developed for the treatment of myelofibrosis, a bone marrow cancer.

"You have no idea how many times we discussed that question," Hood said in an interview at the JP Morgan Health Conference in San Francisco. "We could have launched it."

A long story

It was a particularly personal decision for Hood, wh or Fedratinib co-invented while working at a company called TargeGen Inc. TargeGen sold to Sanofi for a down payment of $ 75 million in 2010, just to see The drug was stored after patients in the trials developed a neurological condition known as Wernicke encephalopathy. [19659002] Hood says that Impact has shown that cases of Wernicke encephalopathy were not associated with the drug and that the profile of fedratinib should make it competitive with the treatment of Incyte Corp. Jakafi, which also treats myelofibrosis.

Analysts see mixed perspectives of fedratinib: it is able to compete with Jakafi as a first choice for patients, it could become a blockbuster. If limited to a second-line therapy for patients for whom Jakafi does not work, it is unlikely to break the $ 1 billion sales mark a year.

Commercial future

Hood and his team are adamant that the drug will work, and that they will be paid. Celgene will pay as much as $ 4.5 billion if global sales of fedratinib reach $ 5 billion.

"We're going to get a lot of that benefit, it's not just biobucks," said Business Director Charles McDermott. [19659002] The Impact team will work closely with Celgene to see the approval of fedratinib, Hood said. The drug has also been in development for polycythemia vera, another form of blood cancer.

"Impact's foundation was motivated by bringing the medication to patients, and we decided that Celgene was the best vehicle to do it," says Hood. "If they do not reach the finish line, we will chase them"

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