Having emerged from the Merck Serono Entrepreneur Partnership Program (EPP) in 2015, Prexton Therapeutics raised a total $41m of funding before it was acquired by pharmaceutical firm Lundbeck for an estimated $1.1bn last year.
Founded in 2012, Prexton has been developing a small–molecule modulator named Foliglurax that could be used for oral treatment of Parkinson’s disease. The modulator acts by stimulating a specific or neurotransmitting target, which in turns activates a compensatory neuronal system in the brain that is largely unaffected by the disease. Its main goal is to treat motor symptoms of the illness, such as resting tremor, muscle rigidity and uncontrolled movement.
The acquisition enabled an exit by Germany-based pharmaceutical company Merck, which had been backing the group since inception, mainly through its corporate venturing unit Merck Ventures, now M Ventures. As it emerged from the Merck program in 2015, Prexton raised a $10m series A round featuring MS Ventures, the venture arm of Merck’s biopharmaceutical division Merck Serono, as well as VC firms Sunstone Capital and Ysios Capital, which co-led the round. In 2017, VC investors Forbion Capital Partners and Seroba Life Sciences co-led a $31m series B financing that featured M Ventures as well as VC firms Ysios Capital and Sunstone Capital.
Jasper Bos, who had been head of healthcare at M Ventures and a Prexton board member at the time of the exit, said: “Prexton was co-founded by M Ventures as part of our efforts to support Merck in mitigating the effects of the closure of the Merck Serono site in Geneva. For this, Merck set up the Entrepreneur Partnership Program, a plan to support former Merck Serono employees who intended to become biotech entrepreneurs.
“The program, which was managed by M Ventures, included support in setting up companies, financing, support in licensing assets, education and more. Examples of companies that were supported as part of this program are Prexton, Asceneuron, ObsEva and Calypso Biotech.
“For Prexton, M Ventures took a very hands-on approach, both in setting up the company, drafting the business plan, negotiating all licences needed from Merck and Domain, and financing these companies. After completion of the seed financing of Prexton by M Ventures, I was assigned not only to be a board member, but to become part of company management, and I acted as an interim head of strategy and business development, where my main task was securing follow-on series A financing.
“For the first three years of its existence, Prexton Therapeutics was financed fully by M Ventures, and after this period formed a derisked investment proposition for financial VCs for the series A financing, which was quickly followed by a €29m ($33m) series B financing led by Forbion and Seroba. We are proud to have been able to contribute to Prexton, and to have been at the birth of a company that became one of the largest acquisitions in the Parkinson’s space.”
In a statement at the time, he said: “The sale of Prexton Therapeutics to Lundbeck is a very strong validation of our model of founding companies based on spinning off assets from Merck and managing them very actively as a shareholder. We are very excited to see the program being acquired by Lundbeck, a leading company in the field of neurology, and feel this is a strong confirmation of the investment thesis on which Prexton was founded in 2012 – namely that the company has a highly promising therapeutic approach for the sympomatic treatment of Parkinson’s disease and dyskinesia.”
By acquiring Prexton, Lundbeck obtained global rights to Foliglurax, which entered clinical phase 2 testing in 2017. Lundbeck was to make an upfront payment of €100m, complemented by a further payment of €805m in development, regulatory and sales milestones to the group of owners.
Anders Götzsche, executive vice-president and chief financial officer at Lundbeck, said: “Foliglurax addresses high unmet needs for effective treatments for Parkinson’s patients with its potential indication, fitting perfectly within Lundbeck’s core areas. This treatment option also appears to be highly interesting for patients, physicians and payors.”
Lundbeck recently saw its shares plunge by 30% as a result of disappointing results for a new schizophrenia treatment it had been testing, according to the Copenhagen Post, and was now “pinning its hopes” on Foliglurax, as well as on an Alzheimer’s treatment currently in phase 1. Data from Foliglurax’s phase two is expected to be available in the first half of 2019.
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