The head of Novartis Pharmaceuticals, David Epstein, said that Spinifex’s lead product, EMA401, “could provide a novel, differentiated treatment approach to provide relief for patients and healthcare providers worldwide”.
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Because EMA401 acts outside the blood-brain barrier it can avoid common side effects such as dizziness or confusion seen with painkillers affecting the central nervous system. EMA401 has already demonstrated positive results in PHN, which develops in some people following shingles.
Novartis said that it will continue the development of EMA401 and will initiate Phase 2b clinical trials in patients with painful diabetic neuropathy (PHN) or postherpetic neuralgia (PDN).
Under the terms of the deal, in addition to the upfront payment of $200 million, Basel, Switzerland-based Novartis will pay additional money contingent on future clinical development and regulatory milestones.
Among Spinifex’s projects under development is a compound called EMA401, which is in Phase II testing. The transaction is expected to close in the second half of this year, pending regulatory approval.
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Spinifex’s founding technology was developed at the University of Queensland by Professor Maree Smith and Dr Bruce Wyse. The Novartis deal has the potential to be a “ten-bagger” (an investment that makes 10 times the original investment) for Melbourne-based GBS Venture Partners, which has poured $20 million into the company over the past decade. Three years later, the Australian venture syndicate reinvested and added Brandon Capital Partners for a Series B financing totaling A$23.05 million ($17.6 million). Existing investors continued to participate along with two U.S.-based VC firms, Novo Ventures and Canaan Partners. “We have tremendous respect for Novartis’ clinical development and commercial expertise, their passion for neuroscience and their commitment to helping patients who are suffering from neuropathic pain“.
