Deal worth $55M, plus potential milestones of up to $666M
Rodeo Therapeutics Corp., a drug-development startup founded by two leading researchers from Case Western Reserve University School of Medicine and a third scientific partner, has been sold to Amgen Inc., a publicly traded international biopharmaceutical company.
Under terms of the agreement, Amgen, based in Thousand Oaks, California, will acquire all outstanding shares of Rodeo for $55 million, plus “future contingent milestone payments potentially worth up to an additional $666 million in cash,” the companies announced today. Total consideration to Rodeo stakeholders could potentially be worth up to $721 million in cash.
Rodeo Therapeutics is a privately held biopharmaceutical company based in Seattle that develops small-molecule therapies designed to promote regeneration and repair of multiple tissues. The therapies have the potential to help address conditions like colitis, among many others.
The company was created based on discoveries published in the peer-reviewed journal Science by three scientific founders: Sanford Markowitz, the Ingalls Professor of Cancer Genetics and Distinguished University Professor at Case Western Reserve; Stanton Gerson, interim dean of the Case Western Reserve School of Medicine and director of the Case Comprehensive Cancer Center; and Joseph Ready, a biochemistry professor at the University of Texas Southwestern.
“Amgen’s purchase of Rodeo marks a giant step forward toward bringing this Case Western Reserve-developed technology to patients,” Markowitz said. “We are thrilled to be partnering with a world-class pharmaceutical company like Amgen, and to be able to benefit from its team of outstanding scientists and drug developers-as well as the company’s financial resources-to speed the development of this promising new class of drugs.”
Initial studies will likely be done in patients with colitis and then hopefully expand to treating other diseases, Markowitz said.
The sale also marks the latest success story in Case Western Reserve’s efforts to “spin out,” or transfer, university-based research and innovation from the lab to the commercial marketplace, especially in the biomedical field.
“This technology and these results are an example of how our process of identifying and investing in our own discoveries is working and is being recognized by the biotech industry,” said Mark Chance, the School of Medicine’s vice dean for research. “Rodeo is only one example of the many companies started by Case Western Reserve University that are attracting the investors and investments needed to get our medical breakthroughs to patients.”
The university’s technology transfer process has supported the emergence of such companies as Convelo Therapeutics Inc., a biotechnology firm discovering medicines for neurological disorders that announced a partnership with Genentech in 2019, and CardioInsight Technologies Inc., a medical-device company sold to Medtronic for about $93 million in 2015.
Rodeo’s science is based on the founders’ research, which showed how a drug-like molecule (called SW033291) could accelerate the recovery of damaged tissue in laboratory animal models of several human disease and medical conditions including healing of colitis and recovery from liver surgery and bone-marrow transplantation. Subsequent studies have shown that the compound can heal tissues in multiple additional disease settings.
Based on this science, Rodeo was co-founded in 2017 with Accelerator Life Science Partners, a venture capital firm that catalyzes the creation of high-quality, cutting-edge life science companies. Rodeo was focused on the development of versions of SW033291 to test in humans.
In the deal, Amgen acquires the license for the original Markowitz, Gerson, Ready and Rodeo-developed technologies, plus the rights to related technology developed by additional Case Western Reserve University School of Medicine faculty members Andrew Pieper, Amar Desai and Derek Taylor.
“Rodeo’s program is a strong strategic fit with Amgen’s inflammation portfolio and efforts to develop first-in-class therapeutics for patients,” Amgen said in its announcement.
The final payout is based on reaching certain undisclosed milestones tied to the drug’s clinical and commercial success.