Roche has linked up with Oryzon Genomics to develop epigenetics-based medicines in a deal which could be worth over half a billion dollars to the Spanish privately-held biotech.

The deal focuses on the Barcelona-headquartered group's inhibitors of lysine specific demethylase-1 (LSD1), an epigenetic modulator that regulates gene expression. Its lead molecule, ORY-1001, was granted orphan drug status by European Medicines Agency in August 2013 and is currently in Phase I/IIa for acute myeloid leukaemia.  

The agreement also includes an initial two-year research pact between Oryzon and Roche’s New York-based Translational Clinical Research Center "to better understand the potential of LSD1 inhibitors in oncology and haematology". John Reed, Roche’s head of pharma research and early development, said Oryzon is working "at the leading edge of LSD1 inhibition, a technology with great potential to bring genuine patient benefit".

Cashwise, Roche is paying $21 million upfront, while other milestone payments could exceed $500 million, plus tiered royalties.

Oryzon chief executive Carlos Buesa said the collaboration "is recognition of our cutting-edge science and our experience in epigenetics, an approach that we believe holds great promise". The company has a second programme in LSD1 inhibition for Alzheimer’s and Huntington__s disease which is expected to enter the clinic in 2015.

The deal has provoked much interest in Spain, according to Francisco Rosa who covers the pharmaceutical industry for the newspaper El Global. He told PharmaTimes that this is the first major agreement reached between big pharma and a small Spanish biotech and is being seen as a good signal to attract others to invest in the sector.

Mr Rosa added that biotech is rated highly in Spain, thanks to the likes of Zeltia unit PharmaMar, AB-Biotics and Neuron Bio. He expects similar deals to the Oryzon/Roche pact to be announced in the short-to-medium term.