Elan buys 24% of US drug company

ELAN HAS spent $20 million acquiring 24 per cent of a US drug discovery company just weeks after disposing of its drug technology unit.

The company will make up to $30 million in additional research funding available to privately-held Proteostasis Therapeutics over the next five years. In return Elan will have first rights to licence compounds developed by the collaboration on an exclusive basis.

Elan chief executive Kelly Martin indicated yesterday that the company was likely to do another licensing deal in the next six months as it focuses on treatments for nerve disorders.

Proteostasis Therapeutics is developing drugs designed to restore proper protein function in patients suffering from a range of disorders. The company has begun to chart what is called the Proteostasis Network, an interacting collection of proteins in cells within the body. If the network misfunctions all body cell types can be affected, leading to a range of diseases. Proteostasis hopes to use knowledge of how the network operates to develop therapies for the diseases.

In a statement yesterday the companies said they hoped to develop Proteostasis’ platform for the discovery and development of “disease modifying, small molecule drugs and diagnostics for the treatment of neurodegenerative disorders such as Parkinson’s, Huntington’s, multiple sclerosis and amyotrophic lateral sclerosis (ALS), as well as a broad array of dementia-related diseases including Alzheimer’s”.

Elan is already heavily involved in the development of therapies for Alzheimer’s disease and other neurological conditions.

Proteostasis, based in Cambridge, Massachusetts, raised $45 million in initial fundraising in 2008 from venture capital investors, including Novartis and Genzyme corporate venture funds.

The deal allows Elan and Proteostasis to extend the arrangement for a further five years. – (Additional reporting, Bloomberg)