MOUNTAIN VIEW, Calif.—Six-year-old Edison Pharmaceuticals has entered into a strategic alliance valued at up to $4.295 billion with Osaka, Japan-based Dainippon Sumitomo Pharma Co. Ltd. (DSP) for the development of drugs targeting cellular energy metabolism. Under the terms of the agreement, DSP will gain select development and commercialization rights in Japan and North America to jointly discovered drugs in exchange for $10 million upfront and a $40 million payment in R&D support. In addition, DSP will fully fund the development of 10 new jointly discovered drugs through IND filing and broaden its rights to EPI-589, currently in phase 1b, to include North America. In exchange, Edison will be eligible to receive in total between $30 million and $105 million per indication associated with successful development of EPI-589 in North America; between $10 million and $30 million per indication in development milestones associated with successful development of jointly discovered compounds in Japan and North America; up to $3.86 billion in commercial milestone payments for jointly discovered compounds and EPI-589 in total; and double-digit royalties on commercial sales.
DSP will also invest $50 million in Edison through a preferred stock purchase agreement. At the discretion of Edison, DSP will invest an additional $50 million in the period between the first and fifth anniversaries of the initial equity closing.
Building on a March 2013 $5 million Edison/DSP collaboration agreement, under the terms of the expanded alliance DSP will gain access to three jointly discovered compounds and fully fund their development in Japan and North America. Edison will have worldwide rights for up to seven jointly discovered compounds, which DSP will fund through IND filing. While DSP will broaden its rights to EPI-589 to include North America, Edison will retain 100 percent ownership of its drug EPI-743, and it will continue to direct all research, clinical development,and commercial development outside of Japan.
Last month, the two companies announced the initiation of a phase 2b/3 study in children with Leigh Syndrome, which Edison will conduct with DSP. The trial is an open-label study lasting six months with the primary endpoint being the Newcastle Paediatric Mitochondrial Disease Scale. Secondary endpoints include neurologic, muscular and biomarker indices.
The joint research and development program is directed at the characterization of the redox control energy system critical to the generation and regulation of cellular energy metabolism. The parties believe that the cellular redox mechanism is an untapped reservoir of new drug targets, especially for high-energy-consuming organs such as the brain.
“The broadening of our partnership with Edison reflects the success we have had to date in our current collaborative development programs. Compelling data suggest that the mitochondria and redox regulation play a central role in a variety of disease mechanisms,” stated Dr. Hiroshi Noguchi, chief scientific officer and member of the board of directors of DSP. He further stated, “As Edison is a leader in redox drug development, we see the highly integrated alliance structure as a way to bring our companies closer together in order to leverage our mutual strengths, make new and important discoveries and bring valuable new drugs to the marketplace for critical diseases with unmet medical need.”
Inherited pediatric mitochondrial disease and a variety of adult neurodegenerative diseases may arise through analogous genetic errors in mitochondrial proteins, giving rise to common biochemical consequences. For example, in the case of Parkinson’s disease, a variety of inherited forms of the disease are caused by defects in proteins associated with mitochondrial function. Additionally, both pediatric mitochondrial diseases and adult neurodegenerative diseases display a common biochemical signature of excess electrons. This is commonly referred to as oxidative stress. Edison is leveraging its core expertise in redox biochemistry and its proprietary technology platform to develop novel drugs targeting redox pathways common to pediatric mitochondrial disease and adult neurodegenerative diseases, as well as fundamental aging mechanisms.
“Our partnership with DSP codifies a common vision for developing drugs targeting unmet medical needs. We will be able to grow and explore a frontier of science through a collaborative and iterative learning process,” stated Edison Chairman and CEO Dr. Guy Miller. “Resources committed by DSP to the partnership will accelerate our first-mover advantage in redox drug development. This will allow us together to expand Edison’s pipeline, bringing 10 new compounds into clinical development over the next five years. In addition, the DSP investment will allow Edison to build its commercial enterprise in pediatric medicines.”
Edison Pharmaceuticals received financial advisory services on the transaction from J.P. Morgan Securities LLC and Barclays, and legal counsel from Morrison & Foerster, LLP.