Proteostasis, Elan in neurodegenerative disease deal

CAMBRIDGE, Mass.—Proteostasis Therapeutics and Elan Corp.recently announced a strategic business relationship to advance Proteostasis'platform for the discovery and development of disease-modifying, small-moleculedrugs and diagnostics for the treatment of neurodegenerative disorders such asParkinson's, Huntington's, multiple sclerosis and amyotrophic lateral sclerosis(ALS), and a broad array of dementia-related diseases including Alzheimer's.

The partnership combines Proteostasis' unique discoverytechnology, novel targets and compounds that modulate key Proteostasis Networkpathways with Elan's expertise in proprietary animal models, biology, medicinalchemistry and clinical development.

"Proteostasis' drug discovery platform is based on anemerging concept in biology, namely that perturbations in the ProteostasisNetwork pathways fundamentally underlie a wide variety of diseases, includingneurodegenerative diseases as well as orphan conditions such as cystic fibrosisand lysosomal storage disorders," said Dr. Christopher K. Mirabelli,chairman of the board of Proteostasis, in a statement. "This allianceprovides a creative approach to financing our discovery platform and supportingthe development of multiple discovery and development programs inparallel."

Under the terms of the agreement, Elan invested $20 millioninto equity capital of Proteostasis and will have an opportunity to provide anadditional $30 million in collaboration funding over five years. As part of theagreement, Elan will become an approximate 24 percent shareholder inProteostasis, obtains a right of first negotiation to exclusively licensecompounds emerging from the combined initiative and will have the right to aseat on the Proteostasis board of directors as well as its scientific advisoryboard. By mutual agreement, the relationship can be extended for a further fiveyears.

Kelly Martin, CEO of Elan, said the partnership reinforcesElan's "commitment and strategic business objective of being an exceptionallyhigh-caliber, science-driven company, and provides a multitude of opportunitiesfor Elan to advance its position as a world leader in the broad field ofneuroscience."

"Importantly,and given the construct of the deal as a capital investment, this transactionis being consummated in a manner that will have a minimal near-term financialimpact on our income statement and enable shareholders to realize the benefitsof the operating leverage, embedded into our business, that combines expected double-digitrevenue growth with a stable and well-defined overall cost structure," Martinadded.