Cardioxyl Pharmaceuticals Inc., a small privately held biotechnology company in Chapel Hill that’s developing drugs for cardiovascular disease, will be acquired by pharmaceutical giant Bristol-Myers Squibb in a deal that could bring Cardioxyl more than $2 billion in extra payments if it meets certain milestones.
The two companies announced they have signed a definitive agreement under which Bristol-Myers Squibb will acquire all of the issued and outstanding capital stock of Cardioxyl.
The transaction, approved by the boards of directors of both companies, includes upfront and near-term milestone payments of up to $300 million and potential additional consideration of up to $1.775 billion upon the achievement of certain development, regulatory and sales milestones, the companies said in a news release.
The acquisition will give Bristol-Myers Squibb full rights to Cardioxyl’s lead asset, CXL-1427, a novel nitroxyl (HNO) prodrug in phase two clinical development as an intravenous treatment for acute decompensated heart failure (ADHF). A prodrug is an inactive medication that is metabolized in the body and converted into a pharmacologically active drug.
“Heart failure is an important and under-served therapeutic area, and we believe Bristol-Myers Squibb is the optimal partner to bring new therapeutic options to the patients who need them,” said Christopher Kroeger, M.D., president and chief executive officer of Cardioxyl.
CXL-1427 releases nitroxyl, a molecule that has demonstrated beneficial effects on heart muscle and vascular function. Pre-clinical and early clinical data indicate that CXL-1427 improves how the heart muscle contracts and relaxes without increasing heart rate or the demand for oxygen.
Current therapies for ADHF that improve heart muscle function also increase heart rate and/or oxygen consumption and are associated with an increased risk for ischemia, arrhythmias and increased mortality.
“The acquisition of Cardioxyl strengthens Bristol-Myers Squibb’s heart-failure pipeline with a phase two asset that has the potential to change the course of the disease rather than simply treating the symptoms,” said Francis Cuss, executive vice president and chief scientific officer of Bristol-Myers Squibb. “Bristol-Myers Squibb is uniquely positioned, with our understanding of patient needs in the hospital setting and our heritage in cardiovascular diseases, to continue development of CXL-1427 as a potential new therapy to address the clinical and economic burden of heart failure.”
The two companies expect the transaction will close during the fourth quarter of 2015. The closing is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act.
Heart failure is the leading diagnosis for patients at the time of discharge from U.S. hospitals and the most common cause of hospitalization for patients over 65 years old. ADHF is the sudden or gradual onset of symptoms, such as shortness of breath, edema, and fatigue, in patients with heart failure leading to hospitalization.
Despite the prevalence and severity of the condition, the treatment options for patients with ADHF are limited. In the U.S., the treatment of heart failure has a direct cost of over $34 billion per year, mostly for hospitalization.
Cardioxyl previously raised $42.5 million in Series A and B financing from life science venture investors including Aurora Funds of Cary, New Enterprise Associates, OrbiMed and Osage University Partners.
The company was founded on nitroxyl technology developed by three scientists at Johns Hopkins University.
This story was originally published by the North Carolina Biotechnology Center and is reprinted with permission.
