Mereo BioPharma and Zydus Lifesciences subsidiary Sentynl Therapeutics have signed an option and licence agreement related to the US commercial and worldwide manufacturing rights to alvelestat, a potential oral treatment for Alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD).
The arrangement enables Sentynl to acquire exclusive US commercial rights to alvelestat upon exercise of the option while Mereo BioPharma will retain commercial rights outside the US.
Under the deal, Mereo BioPharma will receive a non-refundable option fee from Sentynl.
If Sentynl exercises the option, Mereo BioPharma will be eligible for $40m in upfront and research and development payments, and up to $435m in regulatory and commercial milestone payments, along with double-digit tiered royalties on net sales in the US.
Sentynl will have a global licence to manufacture the therapy for AATD-LD and provide funding for the Phase III development programme, which might commence in early 2027.
The companies will jointly streamline the Phase III study design during the option period.
Mereo BioPharma CEO Denise Scots-Knight said: "We are very pleased to have the opportunity to partner with Sentynl to advance alvelestat for patients with AATD-LD. We have been preparing alvelestat for a global Phase III study, backed by positive efficacy data from two Phase II studies.
“We believe Sentynl's commitment to rare diseases and established commercial infrastructure make them the ideal partner for alvelestat and look forward to collaborating with them during the option period, when we plan to refine the global Phase III study design."
Alvelestat is designed to inhibit neutrophil elastase, an enzyme linked to inflammation and lung tissue damage. Its tolerability and safety have been assessed in trials involving more than 1,000 patients across several respiratory conditions.
The therapy has secured orphan drug designation for AATD-LD from both the European Commission and the US Food and Drug Administration (FDA), along with FDA fast track designation.
