IFM Tre, Inc.

For more than four years, Novartis has foot the bill for a partner’s preclinical development of molecules with the potential to target a pathway implicated in inflammatory disorders. Now the pharmaceutical giant has seen enough progress to plunk down $90 million to buy the company, IFM Due, and continue its inflammation drug research. The acquisition announced Wednesday is the culmination of a 2019 agreement that Novartis reached with IFM Due’s parent company, IFM Therapeutics. In exchange for fully funding IFM Due’s R&D, Novartis gained an option to acquire all of that biotech’s stock. IFM Due’s research focuses on cGAS, a protein that regulates STING, a pathway in the innate immune system that senses signals of cellular danger. Picking up these signals triggers an inflammatory response. Inappropriate activation of the STING pathway leads to excessive signaling that drives inflammation. IFM Therapeutics says dysregulation of this pathway could be the basis for several inflammatory disorders. Specific diseases covered by IFM Due’s research remain undisclosed. But Novartis now has full rights to IFM Due’s portfolio of small molecules that could potentially treat conditions driven by excessive STING pathway activity. The Novartis acquisition marks the third exit event for IFM Therapeutics. The Boston company houses its research in subsidiaries, a corporate structure that enables each business unit to strike up partnerships with big pharmaceutical companies that can finance the research and potentially acquire it. The first such deal was Bristol Myers Squibb’s 2017 acquisition of IFM Therapeutics’ cancer immunotherapy research for $300 million up front. In 2019, Novartis paid $310 million up front to acquire IFM Tre, a clinical-stage IFM Therapeutics subsidiary whose lead program was a treatment for the fatty liver disease now known as MASH. Like the prior two IFM Therapeutics deals, the latest acquisition could pay out more depending on the progress of the research. IFM Due milestones could add another $745 million to Novartis’s tab. “The acquisition of IFM Due represents the culmination of a highly productive, four-year preclinical collaboration between Novartis and IFM to develop novel small-molecule STING inhibitors with the potential to treat a spectrum of inflammatory diseases,” Richard Siegal, global head of immunology research at Novartis, said in a prepared statement. “We are excited to advance IFM Due’s STING program and leverage our deep expertise in inflammation science to bring forward transformative medicines that address major unmet patient needs.” Novartis’s IFM Due acquisition comes as a potential rival makes progress with its own research drugging the cGAS-STING pathway. At the start of this year, Ventus Therapeutics began a Phase 1 trial for VENT-03, a molecule the company claims is the first cGAS inhibitor to enter clinical development. In an interview during the J.P. Morgan Health Care Conference in San Francisco in January, Ventus CEO Marcelo Bigal said previous efforts to drug cGAS have fallen short because even though drug hunters could hit the target, their molecules failed to show sufficient potency to make them viable medicines. Bigal said the cell is a dynamic environment in which protein shapes change with the movement of fluid. Ventus’s ReSOLVE technology analyzes proteins in this watery environment to find the pockets where a molecule can bind to its target. “If the proof is in the pudding, I think what ReSOLVE has is the pudding,” Bigal said. Ventus’s Phase 1 trial of VENT-03 is testing various doses of the drug candidate in healthy volunteers. Preliminary data are expected in the second half of this year.

Pictured: Novartis' office in Germany/iStock, TBE Novartis is acquiring IFM Due, a subsidiary of privately held IFM Therapeutics, with the biotech getting $90 million in an upfront payment and remaining eligible for up to $745 million in milestone payments, the companies announced Wednesday. This is not the first deal between the companies. In September 2019, IFM forged an option and collaboration deal with Novartis, which saw the Swiss pharma make fixed payments to finance R&D costs for the program in exchange for the option to acquire the company. Under Wednesday’s acquisition, Novartis now has the full rights to IFM Due’s portfolio of STING antagonists, which can potentially treat inflammation-driven diseases “characterized by excessive interferon” and other pro-inflammatory cytokine signaling, according to the announcement. “The acquisition of IFM Due represents the culmination of a highly productive, four-year preclinical collaboration between Novartis and IFM to develop novel small-molecule STING inhibitors with the potential to treat a spectrum of inflammatory diseases,” Richard Siegel, global head of immunology research at Novartis, said in a statement. “We are excited to advance IFM Due’s STING program and leverage our deep expertise in inflammation science to bring forward transformative medicines that address major unmet patient needs.” Other deals between Novartis and IFM have also been made. In April 2019, the Swiss pharma acquired subsidiary IFM Tre, paying $310 million upfront and another $1.26 billion in various milestones. That deal was focused on developing NLRP3 antagonists for treating inflammatory diseases. Novartis has made other acquisition and licensing moves this year. In February 2024, it bought German biotech MorphoSys for around $2.9 billion, expanding its oncology offerings. In January 2024, Novartis entered a strategic collaboration and licensing deal with Voyager Therapeutics, paying $100 million upfront and $1.2 billion in potential milestones. The deal will see the development of gene therapies for Huntington’s disease and spinal muscular atrophy. Tyler Patchen is a staff writer at BioSpace. You can reach him at tyler.patchen@biospace.com. Follow him on LinkedIn.

Dive Brief:IFM Therapeutics, a biotechnology startup developing drugs that target a part of the immune system, said Wednesday Novartis exercised an option to buy its IFM Due subsidiary for $90 million upfront and as much as $745 million in milestone payments.The deal caps a partnership formed in 2019, when Novartis agreed to fund research into IFM Dues immunotherapies targeting a pathway called cGAS/STING in return for an option to buy the whole subsidiary. The drugs that resulted from the collaboration have the potential to treat an array of serious inflammation-driven diseases, IFM said in a statement.This is the second time Novartis has scooped up an IFM subsidiary. In April 2019, the Swiss drugmaker agreed to pay $310 million up front and as much as around $1.3 billion in contingent payments to acquire IFM Tre, which came with a drug already in the clinic.Dive Insight:In less than 10 years since launching, IFM has now successfully sold off three subsidiaries. That makes the Boston-based company the rare biotech to pull off a liquidity hat trick, noted Bruce Booth of Atlas Venture, one of IFMs financial backers, in a blog post.IFM first sold to Bristol Myers Squibb in 2017, transferring two immuno-oncology programs but retaining rights to the IFM name, personnel and remaining research programs. IFM moved forward with an unusual model, housing development programs in independent subsidiaries that share management and infrastructure. Nimbus Therapeutics, also backed by Atlas, operates in a similar way, as do other so-called hub-and-spoke biotechs.The option-to-buy deal with Novartis for the Due unit offered both IFM and Novartis a way to share risks and rewards. Such deals are relatively rare now, but were more common when the biotechnology industry was suffering from challenging capital markets around 2010 to 2012, Booth said. He estimates about 30% of all such agreements result in the exercising of an acquisition right.For IFM, the original Bristol Myers deal included $300 million upfront, plus as much as roughly $1 billion in milestone payments for each of the first two products to emerge from the transaction. Adding in the latest Novartis deal, the three acquisitions left IFM with $700 million in initial cash and the potential for more than $4 billion in future payments from the acquiring companies.Thats an impressive return for a company that launched in 2015 after incubating as part of the Atlas Venture seed program. In 2016, IFM announced a $27 million Series A financing led by Atlas and Abingworth with participation from Novartis. In 2019, the company closed on a $55.5 million financing and launched a new subsidiary called IFM Quattro as well an incubator dubbed IFM Discovery. '