Durham-based Parion Sciences has signed a licensing deal with international drug firm Vertex Pharmaceuticals that’s worth $80 million up front and could be worth more than $1 billion if drug development programs work out.

Boston-based Vertex has agreed to pay $80 million to gain immediate rights to two compounds Parion has been developing to fight cystic fibrosis and other pulmonary diseases.

But much bigger paydays could come for Parion in the future in the form of milestones and royalties.

Parion says it could net a total of $1.17 billion based on the agreement that was announced on Friday.

The Durham firm is focused on what are called ENAC inhibitors, which are being tested in clinical trials. Cmpounds P-1037 and P-1055 are covered in the initial agreement.

“ENaC inhibition represents a promising opportunity to potentially enhance the benefit of existing treatments for people with CF, and we have worked diligently to bring P-1037 from our research labs and into Phase 2 development,” said Paul Boucher, Parion’s chief executive officer.

“Vertex is the leader in developing new medicines that treat the underlying cause of CF. We are pleased to enter into this collaboration to unify the scientific expertise of both companies to advance P-1037 in CF and other pulmonary diseases,” he added.

Vertex was already pursuing its own cystic fibrosis program.

Who is Parion Sciences?

From the firm’s website:

“Parion Sciences is a development stage company dedicated to research, development, and commercialization of treatments to restore patient’s innate mucosal surface defenses. In the eye and in the lung, our layer of protective mucus plays an important role in keeping our bodies healthy. Sometimes though, either through genetics, aging or environmental stimulus, our innate mucosal defense system can become compromised. Parion’s science driven technologies target respiratory and ocular diseases in which the patient’s ability to protect their mucosal surfaces is compromised.

“Parion is committed to providing effective treatments for diseases with unmet medical needs. Our company was originally founded on advancing our proprietary epithelial sodium channel (“ENaC”) blockers for pulmonary disease. In addition to advancing ENaC blockers for pulmonary diseases, Parion is leveraging our research and development expertise in epithelial biology to expand into new mechanisms, indications, and approaches.”

“This collaboration with Parion complements our ongoing work in CF and supports our two key goals in this disease – to increase the number of people eligible for new CF medicines and to enhance the benefit of treatment,” said Jeffrey Chodakewitz, chief medical officer at Vertex.

“The goal of these planned studies of P-1037 is to determine whether ENaC inhibition can improve lung function in people with CF, including those with mutations unlikely to respond to treatment with the investigational combination of lumacaftor and ivacaftor. Beyond CF, this agreement helps to diversify our pipeline by providing opportunities to evaluate P-1037 as part of Phase 2a studies in multiple other diseases that impact the lungs.”

Additional payments

Here’s how the two firms explained future payments:

  • Parion received an $80 million upfront payment and has the potential to receive up to an additional $490 million in development and regulatory milestone payments for development of ENaC inhibitors in CF, including $360 million related to global filing and approval milestones.
  • Parion has the potential to receive up to $370 million in additional development and regulatory milestones for P-1037 and P-1055 in nonCF pulmonary indications.
  • Parion may also receive an additional $230 million in development and regulatory milestones should Vertex elect to develop an additional ENaC inhibitor from Parion’s research program.
  • Parion will receive tiered royalties on potential sales of P-1037 and P-1055 in CF and other pulmonary diseases that range from the low double digits to mid-teens as a percentage of sales. Vertex will lead future development activities for P-1037 and P-1055 in CF and other pulmonary diseases.