Recludix Inks $1.3B Deal with Sanofi

San Diego-based Recludix Pharma’s name comes from the Latin word “recludo,” which translates to “open up” or “reveal.”

“The company was built around unlocking targets that have been known about for a long time but have never been able to be successfully drugged,” said Recludix CEO Nancy Whiting.

True to its name, Recludix is well on its way to finally opening and unlocking those targets – and Big Pharma is taking notice.

The company announced July 20 it had entered a strategic collaboration with Sanofi (NASDAQ: SNY) to develop and commercialize first-in-class oral small molecule STAT6 (signal transducer and activator of transcription 6) inhibitors for patients with immunological and inflammatory (I&I) diseases. STAT6 is believed to play a key role in multiple dermatological and respiratory diseases, including eczema, asthma, COPD and other severe allergic diseases.

Under the partnership, Sanofi will have global rights to small molecule STAT6 inhibitors. Recludix will advance STAT6 inhibitors from preclinical research and development until the start of Phase 2 clinical trials. Sanofi will then facilitate worldwide clinical development and commercialization responsibilities.

Recludix will receive $125 million in near-term payments, and Recludix may receive more than $1.2 billion in potential development, regulatory and sales milestones, as well as up to double-digit royalties on possible future product sales.

“We also have the option to opt into a 50/50 U.S. profit share, which means we’re not just selling our drug to someone for milestones and royalties. Once we see the data, and if we like it and looks like it will be a good drug, we can opt in to own 50% of it,” Whiting said.

‘Attractive, Elusive Target’

The success of Recludix’s platform is decades in the making, even though the company was founded just under four years ago.

The platform is based on targeting the human body’s 120 SH2 domains, which have evolved over time to mediate interactions between proteins in certain cell functions. In the 1990s and early 2000s, large pharmaceutical companies like Amgen, Novartis and Sanofi had programs to try and create small molecules that could bind the SH2 domains and prevent unwanted protein-protein interactions that cause various diseases.

“After 20 years of work, all major pharma companies failed and considered the target undruggable,” Whiting said.

In 2019, Recludix’s founders came together to relook at the SH2 targets through the lens of recent advancements in biology sciences and utilize modern chemistry approaches and tools built for other targets in the past and apply them to SH2. The company advanced its platform following a $60 million Series A in 2021.

“We now have compounds that can bind the SH2 domain very selectively, so they only bind to that one and not the other 119, and they bind it really potently,” Whiting said, adding that the the “next big hurdle is to make the compound able to be absorbed after taken orally.”

The success of Recludix’s preclinical work led to Sanofi’s major investment in the STAT6 program.

“This collaboration for the advancement of a preclinical oral STAT6 inhibitor speaks to our ability to successfully solve the challenge of drugging this attractive, yet elusive, therapeutic target,” Whiting said.

Whiting added that Sanofi is an ideal partner for the STAT6 program industry due to its “leading I&I therapeutic area expertise and capabilities,” and that the global biopharmaceutical company shares its vision to advance the program quickly.

“Recludix’s approach to targeting STAT6 has significant potential for a number of I&I diseases, especially where a precisely tailored oral therapy could best fit within the patient’s needs at various stages of disease,” said Sanofi Global Head of Research and Chief Science Officer Frank Nestle, “We are excited to partner with the Recludix team to continue to advance innovative strategies for targeting this previously considered undruggable target, aligned with our mission to best serve patients with inflammatory disease.”

In addition to the STAT6 program, Recludix has an even more advanced STAT3 program that the company wholly owns. The STAT3 program targets a different SH2 domain where problematic protein-protein interactions lead to diseases like psoriasis, Crohn’s Disease, rheumatoid arthritis and may “down the road” show some opportunities in multiple sclerosis and even cancer.

“Activated STAT3 is a key driver in 70% of cancers,” Whiting said. “We also think there’s a huge potential in oncology for STAT3.”

Recludix Pharma

Founded: 2019
CEO: Nancy Whiting, PhD.
Headquarters: San Diego
Business: Pharmaceutical company
FUNDING: $60 million Series A, November 2021
Employees: 38
Website: www.recludixpharma.com
Notable: Recludix is the most successful company in advancing and developing SH2 domain inhibitors.