Heptares Ltd has signed a $200 million agreement with the Novartis Option Fund, in which it will apply its G-protein-coupled receptor (GPCR) platform technology to generate drug leads for the Fund’s parent company, Novartis AG.
The deal includes an upfront payment and milestones, plus royalties. “This is an excellent early deal for Heptares, endorsing our technology and further strengthening our financial position,” said Malcolm Weir, CEO of Heptares Therapeutics. “The deal with the Novartis Option Fund demonstrates confidence that our approach can unlock the potential of GCPR targets and forms a solid foundation for other partnerships with leading pharmaceutical companies.”
Heptares’ StaR platform enables membrane-bound GPCRs to be worked on in solution, rendering them amenable to standard drug discovery techniques. The Welwyn-based company is using StaR to develop small molecule drugs against difficult, or previously intractable GPCR targets in a number of disease areas.
Doing a deal with the Novartis Option Fund is one step removed from a formal partnership with the drug company proper. As Weir explained, Heptares will retain control and ownership. “It’s our own programme, which we manage. They have an option, but we are free to partner elsewhere if Novartis choose not to take it forward.”
The Novartis Option Fund invested £7 million in Heptares’ £21 million (then $30 million) first round funding in February 2009.
Novartis Option Fund is the $200 million arm of the Novartis Venture Fund, set up to provide early validation of start-ups in which it invests, by taking options on products of interest to the parent drug company.
“There are advantages to both parties,” said Weir. “From the pharma point of view, they get more flexibility than in a traditional, formal partnering agreement.” For Heptares, securing this deal provides a solid foundation for partnerships with other pharmaceutical companies.
GPCRs are important targets but it has always been a challenge to gain structural information, said Anja Koenig of the Novartis Option Fund. “We believe that the power of Heptares’ technology to resolve GPCR structures and their expertise in small molecule chemistry will lead to rapid progress in the drug discovery programme against Novartis’ nominated target.”
Heptares was spun out of the UK’s Medical Research Council in 2007, to commercialise on new techniques for determining the structure of GPCRs without the need to crystallise them first. The seed funding came from MVM Life Sciences Partners.