Fortress Biotech (NASDAQ:FBIO) closed Thursday’s trading session at $2.09, a slight uptick for the first week of February after it announced a strategic partnership with Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) at the end of January.
The company announced on January 31 that its subsidiary Caelum Biosciences secured a strategic partnership with Alexion Pharmaceuticals. The partnership will allow the two companies to work together towards advancing CAEL-101’s development with a focus on light chain (AL) amyloidosis. The treatment which is currently in development is a first-in-class amyloid fibril that is designed to improve organ function by eliminating or reducing amyloid deposits in AL amyloidosis patients.
AL amyloidosis is a rare disorder that is characterized by a buildup of a light chain protein called misfolded immunoglobulin around tissues. This results in widespread and progressive organ damage and it usually affects the kidneys and heart. Fortress founded Caelum with the goal of pursuing the development of treatments that target rare life-threatening conditions.
This collaboration with Alexion, a global leader in the rare disease field, is a testament to the Fortress team’s expertise in identifying and developing promising treatments to their full potential,” stated Fortress CEO Lindsay A. Rosenwald.
The financial and development terms of the deal
The terms of the agreement indicate that Alexion will purchase a minority stake in Caelum. It will also have the option of purchasing Caelum’s remaining stake based on their pre-negotiated agreements pertaining to Phase 2 data. Caelum will receive roughly $60 million from Alexion as per the deal. The amount will cater to the equity purchase price as well as funding for milestone-dependent developments.
The partnership will also feature potential other payments that may be as much as $500 million. This extra amount will cater to the regulatory, upfront and commercial milestone payments in case Alexion decides to pursue the acquisition option. The partnership will take advantage of Alexion’s rare disease antibody development expertise as well as its hematology commercial franchise.
Caelum and Alexion will join forces to work on CAEL-101’s development program. However, Caelum will handle the development program towards the end of Phase 2 and also CAEL-101’s manufacturing process.