Vertex just found the next big ‘transformative’ thing for the pipeline — at a biotech just down the street

Back in the summer of 2019, when I was covering Vertex’s executive chairman Jeff Leiden’s plans for the pipeline, I picked up on a distinct focus on myotonic dystrophy Type I, or DM1 — one of what Leiden called “two diseases (with DMD) we’re interested in and we continue to look for those assets.”

Reshma Kewalramani

Today, Leiden’s successor at the helm of Vertex, CEO Reshma Kewalramani, is plunking down $250 million in cash to go the extra mile on DM1. The lion’s share of that is for the upfront, with a small reserve for equity in a deal that lines Vertex up with a neighbor in Seaport that has been rather quietly going at both of Vertex’s early disease targets with preclinical assets.

And that’s no small sum to be paying for something that isn’t even in the clinic yet.

David Altshuler

Vertex CSO David Altshuler, who along with the rest of the Vertex executive crew has adopted as low a public profile as you can get while remaining public, pronounced himself in a statement as long interested in DM1 and fascinated by the “transformative” promise that he sees at the heart of the work.

The biotech is Entrada $TRDA, which went public last fall at $20 a share. It’s managed to avoid much of the market turmoil that has been slicing and dicing biotech shares, but nevertheless shed 26% of that price ahead of this news.

Entrada CEO Dipal Doshi, who netted $224 million in the cash upfront from the Vertex deal with $26 million in equity along with $485 million in a string of milestones that stretches out to an uncertain commercial future, counts this as a foundational alliance as they push ahead with plans for an expanded research campaign against Duchenne muscular dystrophy.

“You have two companies that are very similar in terms of the focus, not only from the patients, but also diseases,” he tells me in a late Wednesday preview of the news today. “We also happen to be neighbors in Seaport. In the normal course of discussions, from a business development perspective, we started spending a fair amount of time with Jeff and Reshma and their team, and we saw a lot of synergies between what we wanted to do, and what they are focused on as well too. We both say similar things, in terms of we want to go after diseases and positively affect those diseases, and we want to have many, many different tools to go after them. And so what they saw, they already had a common interest in DM1, as you said, based upon the 2019 interview with Jeff.”

Doshi tells me the staff has grown to 125 — largely R&D staffers — as they’ve carefully constructed the pipeline.

Vertex, of course, is pursuing the transformative label in everything it’s doing in the pipeline, now that it has cornered the market — to date — in the lucrative cystic fibrosis field. That’s involved curative approaches to diabetes, sickle cell disease, muscular dystrophy and more. And this isn’t their first DM1 effort. Vertex aligned with Affinia on the disease, along with programs for DMD and cystic fibrosis.

Affinia tried going public, but folded its S-1 hand just days ago after getting shut down in a frigid year for biotech on Nasdaq.

Doshi was not at all reluctant to flag the alliance, and it’s central importance for the startup, as CSO Natarajan Sethuraman provides some backup on the science side of the company, where they’ve been going after intracellular targets.

“ENTR701, EEV as we call it, Endosomal Escape Vehicles conjugated to oligonucleotide,” says Sethuraman, a Merck vet. “And this oligonucleotide directly goes to the underlying cause of the disease, which is a sequestration of a protein called muscleblind-like protein in the nucleus, and releases it from getting entrapped in the nucleus. And because it is entrapped in this nucleus, several cellular processes are affected, and that leads to myotonia, muscle weakness, and other symptoms in the patients. By restoring the function of this protein, the drug has the potential of relieving those symptoms in the patients.”

The game plan now is to take the program to IND and then pass it on to Vertex for the development work to come.

“I think we have taken a pretty narrow focus,” adds the CEO about the biotech, “and I think that’s allowed us to really progress our science to a point where we’ll be in the clinic in short order. And I think that’s been helpful in terms of that core concentration on really DMD and DM-1. And we’ve been very careful with hiring, John. Like a lot of folks, we’re fortunate that we haven’t had to cut or make any cuts, but we’ve been very disciplined with our hiring.

“But 2023 is going to be one of those years where we really want to push the pedal now. We want to expand our focus within the other DMD Exons. So we have 44 and 45. We want to really start working on 50 and 51. We really want to open up the aperture when it comes to diseases that are non-neuromuscular, because we have some very compelling early data around getting into other disease areas as well too. So I think a lot of focus, little bit of luck, great investors, and really prosecuting and following the science has paid off for us this year.”

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