BY ALEXANDER SOULE
Hearst Connecticut Media
Swiss giant Novartis is acquiring Stamford-based Spinifex Pharmaceuticals, a 20-person startup developing drugs to treat chronic pain, in a deal worth as much as $700Â million.
The deal, in which Novartis would pay $200 million up front, includes additional payments for clinical and regulatory milestones in amounts Novartis did not immediately disclose. Australia”™s Sydney Morning Herald reported those milestones could total as much as $500 million. A Novartis spokesman reached by Hearst Connecticut Media by telephone on Monday declined to confirm or refute the reported milestone payment figure.
- Spinifex Pharmaceuticals, led the past 10 years by CEO Tom McCarthy, is being acquired by Novartis for $200 million up front, and reportedly as much as $500 million in future payments. Photo by Alexander Soule
Named for a desert grass in Australia where it was founded in 2005, Spinifex established its U.S. headquarters in Stamford last year under CEO Tom McCarthy, after raising commitments for $45 million in venture funding with Westport-based Canaan Partners a new investor. Spinifex had previously raised just over $20 million in capital.
Developed by researchers with the University of Queensland, Spinifex”™s lead drug candidate EMA401 is formulated to alleviate neuropathic pain, caused often by tissue damage to nerve receptors. Spinifex”™s treatment would block pain at the nerve receptors rather than in the brain, the target of most other pain treatments, with Spinifex envisioning the breakthrough helping to alleviate chronic pain from chemotherapy, diabetes and other ailments without side effects like dizziness.
“There”™s a lot of processes that go on from the tip of your finger all the way up to your brain and back down again,” McCarthy said in a Monday interview following the acquisition announcement. “You”™re trying to figure out how to block that amplitude, that over-firing of the peripheral nerves.
“If you take an opioid (drug), that”™s working inside the brain and blocking that pain pathway,” McCarthy added. “Ours works outside the brain so you don”™t have the same sort of central nervous system side effects.”
As currently envisioned, Spinifex”™s drug would not be used as a replacement for opioid-based painkillers but for specific cases where neuropathic pain cannot otherwise be alleviated. Pfizer”™s Lyrica and Eli Lilly”™s Cymbalta are options currently prescribed to treat neuropathic pain, and multiple startups are working on competing drugs.
As of June, Spinifex was preparing a Food and Drug Administration study on the safety and efficacy of EMA401 in 360 patients with postherpetic neuralgia, the burning sensation suffered by people afflicted with shingles. Initial study results are not due until October 2016.
“We”™ve shown that it works in some patients, and the real question that Novartis is going to help us answer is what happens in a larger group of patients and then what happens in a variety of different conditions,” McCarthy said. “Drug development is like an inverted cone ”” you start really small and you build up … and eventually you”™ve got the sufficient data to convince the FDA or the European regulators that your drug is safe and effective.”
Hearst Connecticut Media includes four daily newspapers: Connecticut Post, Greenwich Time, The Advocate (Stamford) and The News-Times (Danbury). See stamfordadvocate.com for more from this reporter.
