Dealing out a winning pair

PTC and Celgene announce two investment and target deals

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SOUTH PLAINFIELD, N.J.—PTCTherapeutics Inc., in September announced two deals with Celgene Corp., landingPTC a $20 million equity investment plus a research and option agreement.

The research and option agreement focuses on oncologytargets that PTC's President and CEO Stuart Peltz says the two companies willagree upon later. "If the option is exercised, we will receive funding for ourresearch efforts." Peltz says the form of the research will also be determinedlater, if the option is exercised. Celgene would receive exclusive worldwiderights to any compounds developed and pay milestones and royalties to PTC.

The oncology targets would be used to develop oral,small-molecule drugs through PTC's gene expression modulation bysmall-molecules (GEMS) technology. Compounds target processes of untranslatedregions of messenger RNA, exerting post-transcriptional control to regulateprotein levels. GEMS has already resulted in an internal drug candidate,PTC299, that inhibits VEGF production. PTC299 has been tested in healthyvolunteers, says Peltz, and Celgene's stock-based investment will help PTC movePTC299 into Phase Ib/II studies for breast cancer.

The GEMS technology is broad enough, says Peltz, that it canbe used in diverse targets, giving PTC the ability to retain some targets foritself while partnering others—usually on a target-by-target basis—withcompanies like Pfizer, Merck and CV Therapeutics. "We think it's a veryexciting platform that lessens risk," he says, particularly since companiesinherently have limited internal capabilities. Peltz says PTC has actedstrategically in choosing collaborations. "We've built the company really as athree-legged stool. We've done equity investments, we've done businessdevelopment, and we've done grant funding as well."

PTC is collaborating with the Muscular Dystrophy Association(MDA) and Parent Project Muscular Dystrophy on PTC124, a non-GEMS developed, small-moleculedrug that targets nonsense mutations that cause disease. A $1.5 million grantfrom the MDA supports development of PTC124, which is moving into longer-termtrials for Duchenne muscular dystrophy. Peltz believes the compound may beappropriate for other diseases that are currently untreatable. PTC124 is alsoin Phase II clinical trials for cystic fibrosis thanks to support from theCystic Fibrosis Foundation.

Celgene's chairman and CEO, Sol Barer, said in a preparedstatement that "this investment, combined with the research option, enablesCelgene to participate with PTC in the development of innovative therapies."Celgene declined further comment for this article.

Celgene's business strategy has included acquisitions—SignalPharmaceuticals with its gene regulation platform and Anthrogenesis with itscombination of biotherapeutics and cord blood banking—and licensing deals. Intransactions with EntreMed and Children's Hospital, Boston,Celgene acquired Thalomid, for multiple myeloma and erythema nodosum leprosum,a complication of leprosy. Another Celgene deal with EntreMed and Children'sHospital acquired thalidomide analogs, including a drug Celgene markets asRevlimid. Revlimid treats multiple myeloma and myelodysplastic syndromes withdeletion 5q.

Peltz is pleased to have formalized a relationship withCelgene, by finding a way to collaborate on the targets. "We've known Celgeneand the people at Celgene for some time," he says. Peltz believes thepossibility of pursuing medically important and previously intractable targetsthrough GEMS and creating pill-based drugs leads to stellar collaborations. "Ithink it's a unique area that PTC has been able to plant and grow," he says.


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