Cubist gets option to acquire Illumigen
Seattle Times business reporter
In what could become a lucrative deal for some local biotech investors, Cubist Pharmaceuticals bought an exclusive option to acquire Illumigen Biosciences, a Seattle firm working on a product to treat hepatitis C infections.
Cubist will pay $4.7 million for the option and $1 million to help further the therapy's development. If the pharmaceutical, based in Lexington, Mass., decides to buy closely held Illumigen, it will pay shareholders $9 million and up to $75.5 million in milestone payments related to the progress of the hepatitis treatment.
Illumigen's product could also fight a broad spectrum of viruses other than hepatitis C, Chairman Donald Elmer said. If Cubist pursues that path, it would pay Illumigen shareholders up to $117 million. If Illumigen's product hits the market, Cubist also agreed to pay up to $140 million in additional sales milestones and royalties.
The potential payouts are "quite significant," said Elmer, who manages Seattle-based Pacific Horizon Ventures, Illumigen's lead investor. The company, founded in 2000, has raised about $12 million, mostly from Pacific Horizon.
Illumigen's product aims to have the same virus-fighting abilities of interferon, a protein produced by the immune system, but with fewer side effects. The product, known as IB657, is still in pre-clinical stages; Cubist's infusion of cash will help finish that work before heading into clinical trials. Elmer declined to provide a specific time frame for the pre-clinical studies, but said it would be "relatively short-term."
"The company is at a point right now where it has to take IB657 into a (clinical development) program, and that means the organization has either to step up and acquire that ability internally or it can turn around and do a transaction with someone who already has that capability," Elmer said.
Ángel González: 206-515-5644 or firstname.lastname@example.org
Copyright © 2007 The Seattle Times Company