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Lilly Gains Neuro Disease Biotech in $1.36B Deal

Nerve cells illustration

(Colin Behrens, Pixabay)

15 Oct. 2020. Drug maker Eli Lilly and Co. is acquiring Disarm Therapeutics, a biotechnology company developing treatments for neurodegenerative disorders. The acquisition could bring shareholders in Disarm Therapeutics, based in Cambridge, Massachusetts, as much as $1.36 billion if all aspects of the deal are fulfilled.

Disarm Therapeutics is targeting neurological conditions that result from axon degeneration, a condition found in a number of disorders, affecting axons — the long extended fibers in neurons, or nerve cells — that carry electrical signals from the body of the cell. The degeneration of axon fibers is associated with several neurological disorders, including multiple sclerosis, amyotrophic lateral sclerosis or ALS, glaucoma, Parkinson’s and Alzheimer’s disease, and peripheral nerve pain from diabetes or chemotherapy.

The company’s founders, geneticist Jeffrey Milbrandt and developmental biologist Aaron DiAntonio, study axon degeneration at Washington University in St. Louis and identified a common feature to the condition: a protein known as SARM1, short for Sterile Alpha And TIR Motif Containing 1. The researchers discovered the mechanisms behind axon degeneration that result from SARM1, usually a consequence of trauma or injury, but also inflammation or intraocular pressure associated with glaucoma. Milbrandt and DiAntonio documented the role SARM1 plays in breaking down the body’s built-in protections for axons, including the chemical actions used by SARM1 to destroy these protections.

Disarm Therapeutics’ technology, based on this research and licensed from Washington University, is a platform for developing treatments that limit the effects of SARM1 in axonal degeneration. The researchers say SARM1’s enzymatic activity offers a target for new therapies. The company is also developing non-invasive diagnostics to determine the extent of axonal degeneration and predict the likely effects of treatments.

While the agreement calls for Eli Lilly and Co., in Indianapolis, to acquire Disarm Therapeutics, the details are structured more like a licensing deal. Disarm shareholders will receive an initial payment of $135 million, but future payments are conditioned on Lilly’s efforts to develop new products based on Disarm’s technology. Should Lilly create new SARM1 products, Disarm shareholders would be eligible for up to $1.225 billion in additional payments tied to completion of unspecified development, regulatory, and commercial milestones.

Drugs for neurological disorders are a part of Eli Lilly’s current portfolio. The company offers Amyvid, a diagnostic agent to help radiologists determine the density of beta-amyloid plaques associated with Alzheimer’s disease. And the company has clinical trials underway testing therapies for people with brain plaques but not yet showing Alzheimer’s symptoms, and a treatment for a rare inherited form of the disease.

Mark Mintun, M.D., vice president of pain and neurodegeneration research at Lilly, says in a statement that his company aims to use the acquisition to explore therapies for other neurological disorders. “The scientific team at Disarm discovered an important and highly promising approach to combat axonal degeneration,” says Mintun. “We will move quickly to develop their SARM1 inhibitors into potential medicines for peripheral neuropathy and neurological diseases, such as ALS and multiple sclerosis.”

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