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Zogenix closes acquisition of rare genetic disease-focused Modis Therapeutics

Zogenix Inc. completed its acquisition of privately held Modis Therapeutics Inc., adding a potential therapy to its portfolio of drugs for rare genetic diseases.

Modis' lead product candidate MT1621 aims to restore mitochondrial DNA replication fidelity. The drug is being developed for thymidine kinase 2 deficiency, or TK2d, a genetic disorder common in children that leads to mitochondrial dysfunction and is often fatal.

TK2d affects about 2,500 patients in the U.S. and does not have any approved therapies.

Zogenix, which develops drugs for central nervous system disorders, paid about $175 million in cash and about $75 million of its common stock to the Oakland, Calif.-based biopharmaceutical company focused on therapies for rare genetic diseases.

Modis is also eligible to receive additional milestone payments of $100 million upon U.S. approval of MT1621 and $50 million upon EU approval. Zogenix will also pay a 5% royalty on any future net sales of the drug.

SVB Leerink was financial adviser, while Latham & Watkins was legal adviser to Zogenix. Fenwick & West was legal adviser to Modis.