A team of Goodwin Procter life sciences attorneys recently advised client Acetylon Pharmaceuticals, Inc. in its major collaboration with Celgene Corporation. The collaboration, which allows Acetylon to move rapidly forward with the development of its drug to treat multiple myeloma, is one of the larger such transactions in recent years, both in terms of the development funds available and the potential buyout price.
The agreement provides Acetylon with $100 million in up-front funding for its ongoing drug development program in exchange for Celgene’s option to acquire Acetylon at the completion of its Phase 2 programs. The acquisition price will be determined by appraisal at the time of exercise of the option, subject to a minimum equal to an upfront payment of $500 million, plus potential milestone payments of up to an additional $1.1 billion.
The deal involved an innovative structure whereby Celgene’s option to purchase is effected through the issuance of a warrant to purchase a new class of stock of the company, followed by the redemption of all shares held by existing stockholders.
“We were pleased to play a pivotal role in helping Acetylon to execute this remarkable arrangement with Celgene,” said Lawrence Wittenberg, who led the Goodwin team. “Our cross-practice group or attorneys worked hard to make sure this complex arrangement came together smoothly for all parties.”
Based in Boston, Acetylon has built on technology originally licensed from Harvard Medical School and Dana-Farber Cancer Institute. It is a leader in the development of novel small molecule drugs targeting epigenetic mechanisms for the enhanced therapeutic outcome of cancer and other critical unmet medical needs. Celgene (Nasdaq: CELG), based in Summit, N.J., is a global pharmaceutical company with more than 4,500 employees worldwide.
Acetylon’s epigenetic drug discovery platform has initially yielded a proprietary library of optimized, orally administered Class I and Class II histone deacetylase (HDAC) selective compounds. Acetylon’s lead drug candidate, ACY-1215, is a selective HDAC6 inhibitor in clinical development for the treatment of multiple myeloma.
The Goodwin team on this deal was led by Wittenberg and included partners Janet Andolina, Chad Davis and Scott Webster, counsel Todd Hahn, and associates Sarah Bock, Laurie Burlingame, Nina Chen and Caitlin Vaughn.