Today BMS announced the acquisition of IFM Therapeutics, an emerging biotech focused on modulating core innate immune pathways to treat cancer and autoimmune disease. As described in the press release, BMS will acquire the company for $300M upfront, with potentially up to $1.01 B in future milestones for each of the two lead programs. In addition, the non-oncology related assets and the IFM team are being spun out into a new company.
With the ever-increasing competition in the immuno-oncology (I/O) space, working with the best clinical and commercial partners is critical to the success of early stage I/O programs. Finding great dedicated partners is very enabling, as they provide access to both checkpoint foundational and novel combo therapy candidates, as well as deep clinical expertise and significant resources to execute on clinical development (and commercialization). IFM consciously pursued that BD strategy, as the company understood that its innate I/O activators would be most effective when paired with therapies modulating the adaptive immune system. BMS emerged as IFM’s ideal partner, given its leading role in the I/O field and strong alignment with IFM’s vision and strategy.
By venture standards, IFM is a very young company – Atlas helped co-found and seed the startup back in mid-2015, and the company closed a $27M Series A round in June 2016. Looking back at the original investment memo, there were three important reasons to start and fund a new company in this area, all of which remain true (or even strengthened more) since our September 2015 seed investment:
- Exciting emerging science with validating human genetics. Innate immunity (and its interplay with adaptive responses) is increasingly being recognized as a critical contributor to human disease, both in inflammatory/autoimmune disease and in cancer. Several of the targets of IFM’s programs have human genetic gain-of-function/loss-of-function mutations (NLRP3 and STING, respectively), and polymorphisms associated with numerous autoimmune, inflammatory, and cardiometabolic diseases, which gave us great confidence in the importance of the underlying biology and the potential for pharmacologically modulating these key nodes. Interrogation of these innate pattern recognition receptors (e.g., inflammasome, STING) offers opportunities to impact key nodes in the aberrant immune responses in cancer and autoimmunity.
- Backing a winning team. Fundamentally, this was a bet on founder Gary Glick, a serial entrepreneur with prior experience founding, building and running a venture-backed biotech. Gary left his prior company in the spring of 2015 with the aspiration of moving to Boston to start his next gig. As with many entrepreneurs, the referral network connected us: John McCall (a grizzled medchem veteran and common friend) introduced Gary to us. Atlas spent the next few months getting to know him well. During that time, my partner Jean François Formela, as well as Michael Gladstone, worked closely with Gary to co-found IFM late in the summer of 2015. Other scientific co-founders include Luigi Franchi and Anthony Opipari (both “Italians From Michigan”, hence the name IFM), as well as Matthias Geyer and Eicke Latz – all of whom bring significant collective experience in the innate immune area. Gary quickly built a great R&D team, recruiting Bill Roush as a chemistry lead, bringing former Atlas EIR Shomir Ghosh back into the fold as Chief Scientific Officer, and landing Dennis Dean from Vertex as Chief Development Officer. More recently, we were fortunate enough to attract Novartis’s former Global Head of Strategic Alliances for NIBR, Martin Seidel, to join as EVP of R&D. IFM also assembled a superb set of scientific and clinical advisors. Attracting and retaining this breadth and depth of talent early in their trajectory is a hallmark of many successful early stage companies.
- Emerging early strategic partner interest. We knew going into this that because of the strong science and genetics, and the fierce competition that exists for compelling I/O assets, we may have early opportunities to partner with a big player like BMS with a complementary portfolio. Other deals flagged its potential: the Aduro STING agonist and Surface’s antibody portfolio were partnered with Novartis early in their development. Despite being preclinical-stage assets, IFM’s programs all had the “high innovation quotient” character and first/best-in-class potential – which is key to driving early BD interest. As soon as the company came out of stealth in 2016 with its Series A financing, active BD dialogues began – culminating with this announcement.
As is evident in the publicly available metrics around the deal, IFM has delivered a very attractive return on our investment. Having raised ~$30M of equity capital in the seed and Series A, the upfront payment of $300M represents a significant multiple – with access to the far right-side of the return distribution through the milestones. With some future success in the very capable hands of BMS, this transaction could return all of Atlas Venture Fund X. This is the second significant early exit in that fund, with Delinia being acquired by Celgene earlier this year.
But IFM’s story isn’t over. This is just the start of the next chapter. As noted above and in the press release, this transaction is yet another example of the acquisition-spinout model of capturing full value from the portfolio. BMS is acquiring IFM for its immuno-oncology portfolio, including NLRP3 and STING agonists, and we are spinning out the autoimmune assets into a new company, financed with an option fee from BMS to advance the development of those programs. The new company, IFM Therapeutics LLC, will retain the team, facilities, and research programs, including an NLRP3 antagonist program focused on inflammation and fibrosis.
Congrats to Gary and the team, and to BMS for securing these exciting programs. We look forward to seeing them advance into the clinic and to watching the next chapter for Gary and his team.