July 18, 2024


Unlimited Technology

Valley News – Biotech startup sells for $150 million

LEBANON — An Upper Valley biotech startup co-founded by Dartmouth engineering professor Tillman Gerngross is being acquired by a Boston-area biotech firm in a cash and stock deal valued at $150 million, the latest milestone for the star Thayer School of Engineering professor and entrepreneur who has a growing list of successful business launches to his credit.

Repligen Corp. of Waltham, Mass., announced it has agreed to acquire Avitide, Inc., which develops purifying processes for drugs so that they can be safely administered to humans, for $75 million in cash plus $75 million in Repligen common stock.

The deal is expected to close in the third quarter “subject to the satisfaction of customary closing conditions,” Repligen said in a news release.

Gerngross, along with his former graduate students, Kevin Isett and postdoctoral researcher Warren Kett, founded Avitide in 2013 to develop rapid and reliable purification technology for biologics — drugs developed through genetic engineering as opposed to chemical compounds — and raised a total of about $40 million in funding from private investors, Gerngross said.

The 8-year old company, based at the Dartmouth Regional Technology Center at Centerra Resource Park in Lebanon, has contracted with 18 different companies, including big pharma and venture-backed startups, to develop purification technology for 34 programs from preclinical states to commercialized products, according to the company’s website.

Avitide says its technology significantly reduces the time and cost in the drug development process for complicated biologics, enabling them to be brought to market sooner than otherwise would have been the case.

Gerngross, who is involved with several other Upper Valley startups, has been chairman of Avitide while Isett is CEO and Kett is chief scientific officer.

Shareholders include the co-founders, employees, investors who have helped fund the company and Dartmouth College, which frequently has a stake in startups that originate in college laboratories, programs and faculty research.

“The work originated at Dartmouth. That’s why Dartmouth received some shares at the beginning and they’ll get some money from the sale of these shares now,” said Gerngross.

Avitide currently has about 40 employees.

Repligen said in its news release that Avitide is expected to contribute approximately $10 million in revenue in 2022 and will increase Repligen’s adjusted earnings per share in 2023, although it didn’t specify by how much.

“The addition of Avitide is a major step forward in building out our proteins business and in particular our affinity ligand discovery engine,” said Repligen CEO Tony Hunt, adding “the acquisition builds off the excellent partnership we have already established with Navigo GmbH and really strengthens and expands our ligand discovery and development capabilities.”

(Ligands are molecules that bind to other, usually larger molecules, which then can trigger cellular responses).

Isett in a statement called Repligen “the ideal partner to drive the expanded adoption of existing products and introduction of new products to the market through the combination of their established global operational and commercial capabilities and Avitide’s unique and differentiated affinity chromatography discovery platform.”

Critically for the Upper Valley high-tech scene, Repligen said Avitide will remain based in Lebanon.

“It will be ‘business as usual’ for the Lebanon site,” Sondra Newman, global head of investor relations at Repligen, said via email on Monday. “We have no plans to close or consolidate operations. The current team and all employees are expected to stay on (all will have an offer to remain with Repligen).”

“We believe the continuity of the existing management team and the company culture is important to our combined future success,” she added.

The sale of Avitide is the second big deal for Gerngross: he and his partners previously in 2006 sold GlycoFi, which pioneered using yeast cells to generate human proteins for the treatment of autoimmune diseases and had launched only six years earlier, to pharma giant Merck for $400 million in cash.

At the time of the deal Merck said GlycoFi would propel it to become a “significant player” in the emerging field of biologics.

But in 2016, citing the need to focus in more profitable areas, Merck pulled GlycoFi out of Lebanon, saying that a “select number” of the employees had transferred to other Merck labs.

Gerngross said on Monday it is a misconception that he launches companies only to sell them a few years later when they’ve gained traction.

“None of these companies are built to sell. They are built to have an impact. But often when companies are starting to have an impact, other companies. want to buy them,” Gerngross said.

Other companies that Gerngross remains involved with as co-founder and chairman are Adimab, which develops antibodies for therapeutic medications and Alector, which is researching and developing ways to harness the brain’s immune system to treat neurodegeneration.

Alector, launched in 2013, went public in 2019 and is now valued at $2.2 billion.

Last year Gerngross spun-off a newly-formed company, named Adagio Therapetics, to develop and commercialize antibodies to address the COVID-19 pandemic as well as future viral diseases with pandemic potential.

Adagio went public 13 months ago. As of Monday, it was valued at $5.1 billion.

“I’m just simply interested in where there are gaps in technology to come up with better medicines,” Gerngross said.

John Lippman can be reached at [email protected] and at 603-727-3219.

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