Novartis Gains Exclusive Option to Acquire Elixir Pharmaceuticals

Novartis (Basel) signed an agreement that grants the company an exclusive option to acquire Elixir Pharmaceuticals (Cambridge, MA) upon the successful completion of a Phase IIa clinical study of Elixir’s lead oral ghrelin antagonist, which is now the subject of preclinical studies. Elixir is developing the ghrelin antagonist as a treatment for type 2 diabetes and plans to file an investigational new drug application with the US Food and Drug Administration.

The value of the agreement, including the initial acquisition payment and potential regulatory and sales milestone payments, could be greater than $500 million. The deal gives Novartis a right to an exclusive worldwide license for the ghrelin antagonist under preagreed conditions.

Ghrelin is a hormone that the stomach secretes and that primarily acts in the hypothalamus. Ghrelin plays a large part in regulating glucose homeostasis, lipid profiles, and body composition. Elixir’s scientists found that genetically eliminating the ghrelin receptor increased insulin sensitivity, improved triglyceride and cholesterol levels, and caused resistance to obesity in mice that were fed a high-fat diet.

Elixir used structure-assisted drug design to develop potent small-molecule antagonist compounds that block the ghrelin receptor. When these compounds were administered orally to animal models of diet-induced obesity and early diabetes, they displayed metabolic effects that were similar to those seen in the knockout models (e.g., improved blood glucose levels, insulin resistance, triglycerides, total cholesterol, and liver fat).

“Type 2 diabetes continues to grow as one of the leading causes of excess morbidity and mortality around the world. New therapeutic options for this serious and chronic disease are sorely needed,” said Paul Martha, Elixir’s president and CEO, in a company press release. “Therefore, we are extremely pleased to have reached agreement with Novartis on the tremendous potential value of our ghrelin antagonism program.”

Elixir also completed a $12-million equity financing round that was led by MPM Capital. Elixir’s existing investors ARCH Venture Partners, Oxford Bioscience Partners, the Omega Fund, and Physic Ventures contributed to the financing round as well.

Elixir recently completed Phase III clinical trials of its Metgluna and Glinsuna product candidates for the treatment of type 2 diabetes. The company is also developing EX-1314, an oral drug to treat gastrointestinal hypomotility disorders such as type 1 diabetic gastroparesis.