Novartis signs deal with Heptares worth up to $200 million

Heptares Therapeutics has signed an agreement with a unit of the Swiss giant Novartis which could bring in as much as $200 million to the UK-based firm.

Heptares, a drug discovery company set up in 2007 which focuses on G-protein-coupled receptor (GPCR) targets, has done a deal with Novartis Option Fund, part of the Basel-based group’s investment arm. The agreement will see Heptares apply its proprietary StaR technology to generate novel drug leads against a “nominated, unspecified GPCR target of interest to Novartis”.

Cashwise, the agreement includes upfront and potential milestone payments totaling up to $200 million plus royalties. However, full financial terms were not disclosed.

Malcolm Weir, Heptares chief executive, said this is “an excellent early deal” for the Welwyn Garden City-based company, “endorsing our StaR technology and further strengthening our financial position”. A pact with Novartis “demonstrates confidence that our approach can unlock the potential of GCPR targets and forms a solid foundation for other partnerships with leading pharmaceutical companies”.

Anja Koenig, speaking for the Novartis Option Fund, noted that “it has always been a challenge to gain structural information on GPCRs” but “we believe that the power of Heptares’ technology” to resolve those structures “and their expertise in small molecule chemistry will lead to rapid progress” against the nominated target.” The fund is already involved with Heptares, having invested £7 million in its £21 million financing in February 2009 in a syndicate with MVM Life Science Partners and Clarus Ventures.