Cubist Pharmaceuticals, Inc. said it would buy Illumigen Biosciences, Inc. for $9 million in cash pursuant to a definitive agreement and plan of merger entered into on December 24, 2007.
Under the agreement terms Cubist will acquire Illumigen's lead compound IB657, a protein therapeutic in pre-clinical development for the treatment of Hepatitis C Virus (HCV) infections. Cubist expects that an IND for IB657 will be filed in 2008.
Pursuant to the terms of the agreement, which was approved by the Boards of Directors of each company, Cubist will pay to the Illumigen stockholders $9 million (after adjusting for Illumigen's closing cash balance) in cash and Illumigen has become a wholly-owned subsidiary of Cubist. Cubist will make payments during the development of IB657 as a therapy for HCV infections of up to $75.5 million upon achieving certain development and regulatory milestones. If Cubist develops Illumigen products for the treatment of viruses other than HCV, development and regulatory milestone payments of up to $117 million could apply. Assuming that HCV or other Illumigen antiviral products are commercialised, additional milestone payments of up to $140 million, as well as tiered royalties, could apply.
Mike Bonney, president and CEO, Cubist Pharmaceuticals, said "We are excited about the opportunity of filing an IND for IB657 in the coming year and advancing it into the clinic. An HCV product candidate is an important addition to our pipeline, and leverages our antiinfective development, regulatory, and commercialisation expertise."
No financing will be necessary to complete the acquisition of Illumigen or to fund the development of IB657. The impact of any charges related to purchase accounting, including in-process R&D, will be recorded in Cubist's 2007 fullyear results.
Donald Elmer, chairman, Illumigen Biosciences, said "We believe that Cubist is ideally positioned to exploit the immediate opportunity for IB657 against HCV, and potentially for additional viral infections."
HCV is a virus that primarily targets the liver, currently causing infection in more than 4 million people in the US and 180 million people worldwide. The virus is difficult to eradicate, with infected patients eventually developing chronic liver infection, and, in some cases, liver cancer. HCV infection is the most common reason for liver transplantation in the US and Western Europe and the leading cause of death from liver disease. No vaccine is currently available to prevent HCV infection. Current HCV therapy combines a pegylated-interferon with ribavirin for up to 48 weeks of treatment. Current therapy has significant problems with both safety (e.g., significant treatment limiting adverse effects and contraindications) and efficacy (e.g., 80 per cent of HCV infections in the US are due to genotype 1 virus for which the efficacy rate of current therapy is approximately 40 to 50 per cent). The HCV market was $2.2 Billion in 2005 and is projected to double to $4.4 Billion in 2010. This growth will be driven by an increase in the number of patients being treated, uptake of new drugs, and the use of multi-drug treatment regimens.
IB657 is a pre-clinical protein therapeutic being developed for treatment of HCV infection. Based on its antiviral activity, IB657 may have therapeutic utility in the treatment of certain other viral diseases. Pre-clinical studies to assess activity against these viruses may occur in parallel with its development for HCV infection.
Illumigen Biosciences, Inc. discovers beneficial human genetic mutations that might provide a roadmap for novel therapeutic drug mechanisms. The discovery of IB657 resulted from an investigation into the cause of apparent immunity to HCV infection enjoyed by people with a specific naturally occurring genetic mutation.
Cubist Pharmaceuticals, Inc. is a biopharmaceutical company focused on the research, development, and commercialisation of pharmaceutical products that address unmet medical needs in the acute care environment. The Cubist product pipeline includes pre-clinical programmes that address unmet medical need in Gram-positive infections, Gram-negative infections, and CDAD (Clostridium difficile-associated diarrhoea).