The failure in type 1 diabetes of a project called teplizumab has an important read-across that goes beyond its originator, venture-backed MacroGenics Inc., and licensee Eli Lilly & Co. The question several small biotechs will be asking themselves is whether it’s a one-off glitch or a drug-class effect.
On the one hand, the news means Tolerx Inc., another venture-backed biotech, now has the most advanced of only four competing projects in this indication. If positive, Phase III results would make Tolerx a clear takeover candidate for GlaxoSmithKline PLC, that project’s licensee.
After all, why should GSK pay Tolerx milestones (estimated at $525 million in total) and continuing royalties on the project in question, otelixizumab, when a clean buyout is a logical endgame for both companies? A takeover would, in turn, likely spell a nice windfall for the U.K.’s BTG PLC, which licensed otelixizumab to Tolerx and is due 50% of the milestone revenue from GSK.
To read the full, original article click on this link: Small Biotechs Braced For MacroGenics Effect - Venture Capital Dispatch - WSJ
Author: Jacob Plieth
