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Novartis enters $840M agreement to potentially buy IFM Therapeutics unit

IFM Therapeutics Inc. said its subsidiary IFM Due entered into an exclusive option agreement worth about $840 million with Novartis AG to develop therapies for cancer and severe inflammatory disorders.

The Basel, Switzerland-based pharmaceutical giant will completely fund IFM Due's research and development of therapies that specifically target the cGAS/STING pathway, which detects foreign DNA and triggers defense mechanisms in the body. Mutations that activate this pathway can cause a variety of severe auto-inflammatory and auto-immune diseases.

IFM Due has two preclinical programs in development. The first one focuses on developing a drug to prevent the STING protein to stimulate excessive production of pro-inflammatory proteins that are involved in cell signaling. The company plans to conduct clinical trials of the medicine in 2021.

The second program is aimed at developing inhibitors of cGAS protein that would block the pathway at a more upstream node.

Under the agreement, Novartis would make fixed payments in exchange for the option to acquire IFM Due. If Novartis exercises the option, IFM Due's shareholders will be entitled to a total of up to $840 million in consideration, including an upfront payment when the option is closed.

"In the broad set of diseases where excessive production of interferon and other pro-inflammatory cytokines via the cGAS/STING pathway is an underlying driver, precisely targeting this pathway is the most attractive therapeutic approach," IFM Executive Vice President of Research and Development H. Martin Seidel said in a press release.

Novartis had acquired IFM Therapeutics from Bristol-Myers Squibb Co. in May.