A Durham life sciences startup developing a medication for a rare skin disorder is being acquired by a New Jersey biotech company in a deal worth up to $947 million.
Publicly-traded Amicus Therapeutics announced Monday that it is buying Scioderm, which has nine employees, in a cash and stock transaction expected to close in the third quarter this year. Amicus will initially pay $229 million to Scioderm’s private investors, with additional payments for meeting clinical, regulatory and sales milestones if Scioderm’s experimental drug, Zorblisa, is approved.
The potential market for Scioderm’s medication is estimated at over $1 billion globally, Amicus said in its announcement. Zorblisa is a skin cream for treating Epidermolysis bullosa, a rare disease afflicting 30,000 to 40,000 people in with blistering skin and festering sores. The condition, known as EB, has no cure and and most children born with it don’t survive into adulthood.
Amicus CEO John Crowley, who sits on Scioderm’s board of directors, said Amicus plans to complete clinical development of Zorblisa, adding that the Scioderm acquisition positions Amicus as a leading global rare disease company.
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“This was not a competitive process,” Crowley told analysts in a conference call. “We went to their board with this idea a short while ago, showing them how we think that we can develop this drug faster and better together than Scioderm could by continuing as an independent company.”
Amicus, founded in 2002, employs 153 people and doesn’t have any products on the market. It is testing experimental medications for Fabry disease and Pompe disease, both of which can lead to death. Crowley has two children with Pompe disease.
Scioderm’s Zorblisa, which is still undergoing clinical trials, was one of the first treatments in the country to receive “breakthrough therapy designation” in 2013 from the Food and Drug Administration. The FDA designation is intended to expedite development of medicines for life-threatening conditions and is awarded to drugs that have demonstrated promise and potential.
Scioderm’s founder and CEO, Robert Ryan, will join Amicus’ senior leadership team after the deal closes. An Amicus spokeswoman said Ryan would not be available for interviews Monday.
Founded in 2012, Scioderm has previously raised $36 million in private funding. After being absorbed by Amicus, Scioderm will remain in Durham.
Amicus executives said they expect seven years of patent protection for the Scioderm drug in the United States and a decade in Europe before cheaper generics are available.
Children with EB are called “butterfly children” for their fragile skin and often can’t wear shoes or other clothing that causes friction with the skin.
EB is currently treated with bandages, wound dressings, infection prevention and pain treatments. The palliative approaches can cost $10,000 to $15,000 a month, not including the cost of hospitalization.
Amicus executives said that Zorblisa wouldn’t treat the underlying cause of the disorder and wouldn’t replace the need for bandages in EB patients.
Scioderm tested Zorblisa on 48 patients in a Phase 2 clinical trial that demonstrated improved healing in EB patients. The company reported the median time to heal wounds was 30 days for patients using the medication and 91 days without the drug. In some patients the lesions healed within several weeks and patients reported no severe side effects.
The Phase 3 clinical trial is 30-percent enrolled and is expected to sign up 130 people. Results are expected in late 2016.