If you thought Aragon’s exit was impressive, check out Seragon


As far as living the biotech dream goes Richard Heyman has done it twice in the space of a year, and all from effectively the same start-up that he co-founded in 2009.

When as chief exec of Aragon Pharmaceuticals he sold that business to Johnson & Johnson in 2013 for up to $1bn the focus was on ARN-509, heralded as a key competitor to Medivation’s prostate cancer drug Xtandi, and few paid attention to an early-stage programme spun off into a separate entity. Now Roche has paid even more to get its hands on that start up, Seragon Pharmaceuticals.

Under the deal announced today the Swiss firm will acquire Seragon for $725m up front, followed by up to $1bn if certain future milestones are met. Only one private funding round was conducted after the spin out from Aragon last August by Mr Heyman and Aragon’s executive team – a $30m raise that included VenBio, Topspin Fund, Aisling Capital, OrbiMed Advisors and The Column Group.

The takeout by Roche represent a highly impressive amount for what is basically a one-project company – and that asset, the selective estrogen receptor degrader (SERD) ARN-810, is barely in phase I. As private company takeovers go, the move is up there with Plexxikon, bought by Daiichi Sankyo in 2011 for $805m up front.

But the deal is also noteworthy in another respect: Roche’s Genentech business is regarded as a global cancer powerhouse, so for the group to turn to M&A to strengthen its oncology pipeline seems highly unusual.

Tried and tested

If Aragon’s approach was to go one up on Xtandi, Seragon’s is to outdo another tried and tested oncology approach – selective estrogen receptor modulation (SERM) to tackle hormone receptor-positive breast cancer (Medivation miscue allows Aragon to fall to J&J, June 18, 2013).

Marketed and now generic SERMs include Nolvadex, Fareston and Evista. Meanwhile, Faslodex is an estrogen receptor antagonist that has also been called a SERD. Roche says the problem with SERM and aromatase inhibitor approaches is disease relapse – something that only recently was put down to mutation of the estrogen receptor to activate it even without estrogen binding.

This is where SERDs come in. Instead of modulating the receptor’s activity, SERDs alter the structure of the receptor, resulting in its elimination. This approach, the Swiss firm hopes, might one day redefine the standard of care for hormone receptor-positive breast cancer.

In the meantime, Bryan Garnier analysts believe that ARN-810 could be positioned in the later-stage setting, once SERMs or aromatase inhibitors are no longer preventing hormone-dependent cancers from estrogen feeding.

Interestingly, ARN-810’s phase I study, begun last year, is not due to yield results for another 12 months or so. Seragon’s management team had initially hoped to use the $30m series A cash to complete the trial and begin phase II, as well as seeking an IND for a SERD follow-on project.

If you were a biotech bull you might therefore have expected the phase I data readout to serve as a possible trigger for a licensee to buy into the project or – at a stretch – to acquire the company.

Roche has shown that even this expectation was too conservative.

Status Study design Trial ID
Phase I Open-label, in 72 postmenopausal women with estrogen receptor-positive breast cancer NCT01823835

To contact the writer of this story email Jacob Plieth in London at jacobp@epvantage.com or follow @JacobEPVantage on Twitter

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