Monash spin-out Cortical seals $1m deal with Genzyme

Cortical, a spin-out from Monash University in Melbourne, has closed a deal worth up to AUD$1 million with US biotech Genzyme to collaborate on the development of oral drugs for inflammatory diseases based on Cortical's small molecule antagonists of the cytokine macrophage migration inhibitory factor (MIF).

The deal sees Genzyme making an up-front equity investment in Cortical of $570,000, with the option to make more equity investments of up to $430,000 if certain developmental milestones are reached.

While the details of the agreement are confidential, the two companies plan to collaborate to develop one or more oral drugs for inflammatory diseases such as rheumatoid arthritis, multiple sclerosis and colitis through to Phase II clinical trials. Genzyme will complete clinical development and commercialisation and will hold an exclusive worldwide license to any products that arise from the collaboration.

"We estimate that it is in the top five deals in Australia this year," said Cortical's CEO, Assoc Prof Eric Morand. "Genzyme's scientific, regulatory and commercialisation resources will help us fast-track our technology."

But Cortical will retain rights to develop localised applications for the small molecule drugs, such as topical formulations and drugs delivered by devices.

Morand said the ability to make small molecule antagonists against inflammatory cytokines such as MIF was a major scientific advance, with a sizeable and largely untapped potential market.

"This deal puts Cortical on the map in a hot area with a major global partner," he said. "It's a major step for us, and we plan to exploit it."

The deal is a significant step for the young company, which only entered the Australian biotech scene six months ago, with the investment of $2 million from GBS Venture Partners' Genesis Pre-Seed Fund and Start-up Australia Ventures Fund.