Zogenix Inc. is acquiring rare disease therapy developer Modis Therapeutics Inc. in a $250 million deal that would give it access to therapies for rare genetic diseases.
Modis' lead product candidate MT1621 is being developed for Thymidine Kinase 2 deficiency, or TK2d, which predominantly affects children and is often fatal. Mutations in the TK2d protein affect tissues in the muscle, liver, or both the muscle and brain.
Under terms of the transaction, Oakland, Calif.-based Modis will receive an up-front payment of $250 million, comprising $175 million in cash and $75 million in Zogenix common stock. Modis is also eligible to receive additional milestone payments of $100 million upon U.S. approval of MT1621 and $50 million upon EU approval of the drug. Zogenix will also pay a 5% royalty on any future net sales of the medicine.
Zogenix President and CEO Stephen Farr said the drug — which has received the U.S. Food and Drug Administration's breakthrough therapy designation and the PRIME designation in EU — may be eligible for an accelerated regulatory path in the U.S. and Europe. Farr said the Emeryville, Calif.-based company will work with regulatory authorities to discuss the next steps for MT1621, which has shown benefit in patients in a phase 2 clinical trial called Retro.
The acquisition, which is expected to close in September, is subject to the satisfaction of customary closing conditions, including approval of Modis' stockholders and certain antitrust approvals.
SVB Leerink was financial adviser, while Latham & Watkins is legal adviser to Zogenix. Fenwick & West was legal adviser to Modis.
