Strategic Collaboration Includes Option for Celgene to Acquire Acetylon

Boston, MA (Press Release) - Acetylon Pharma­ceu­ticals, Inc., the leader in devel­op­ment of selective histone deacetylase (HDAC) inhibitors for en­hanced thera­peutic out­comes (the “Company”), today announced a strategic col­lab­o­ration and option agree­ment with Celgene Corpo­ra­tion (NASDAQ: CELG), which sup­ports the devel­op­ment of Acetylon’s portfolio of oral, selective HDAC inhibitors in on­col­ogy, hematology, im­mu­nol­ogy, and neurologic disease indi­ca­tions. The agree­ment in­cludes an exclusive option for the future acqui­si­tion of Acetylon by Celgene.

The col­lab­o­ration will focus on the con­tinued clin­i­cal ad­vancement of Acetylon’s lead can­di­date, ACY-1215, an oral first-in-class selective HDAC6 inhibitor being developed for hema­to­logical malig­nan­cies, ACY-738 for neurological diseases, an HDAC1/2 inhibitor, and a yet unnamed project, spanning cancer and non-cancer disease indi­ca­tions. Under the terms of the agree­ment, Acetylon will receive a $100 million upfront cash payment. In return, Celgene receives an exclusive option to acquire Acetylon at a cash purchase price that will be within a defined value range and based upon future independent valuations of Acetylon. Acetylon will retain control of its drug devel­op­ment pro­grams during the option period. If Celgene exercises its option to acquire Acetylon, an upfront payment determined from the valuation process and subject to a minimum of $500 million will be paid at the time of closing. Additionally, Acetylon share­holders will be eli­gible to receive poten­tial future mile­stone payments for either approvals or addi­tional indi­ca­tions of drugs developed by Acetylon and for accomplishing defined sales targets. If all the mile­stones are achieved, the addi­tional value accruing to Acetylon share­holders would be $1.1 billion, com­prised of $250 million for regu­la­tory mile­stones and $850 million for sales mile­stones.

“Acetylon’s work in epigenetics and resultant pipe­line has shown sig­nif­i­cant promise,” said Mark Alles, Celgene’s Executive Vice Pres­i­dent, Global Head of Hematology and Oncology and observer to the Acetylon Board of Directors. “The expansion of our rela­tion­ship with Acetylon from our original equity investment to this exciting strategic col­lab­o­ration dem­onstrates our belief that Acetylon‘s highly selective HDAC inhibitors have the poten­tial to meaningfully im­prove clin­i­cal out­comes for patients with a variety of diseases, in­­clud­ing hematology, on­col­ogy, diseases of the immune system, and neurodegenerative diseases.”

“Celgene has been an enthusiastic in­­vestor and sup­porter of Acetylon’s mission since com­plet­ing its equity investment in our com­pany early last year,” said Walter C. Ogier, Pres­i­dent and Chief Executive Officer and co-founder of Acetylon. “We are excited to be able to work with Celgene under the expanded framework of this new devel­op­ment and option agree­ment. The $100 million in up-front, non-dilutive funding should en­able us to aggressively ad­vance our drug pipe­line and create sub­stan­tial value for our patients and in­ves­tors.”

About Acetylon Pharma­ceu­ticals

Acetylon Pharma­ceu­ticals, Inc., based in Boston, Massachusetts, is a leader in the devel­op­ment of novel small molecule drugs targeting epigenetic mech­a­nisms for the en­hancement of thera­peutic out­comes in cancer and other critical human diseases. The Company’s epigenetic drug discovery plat­form has yielded a pro­pri­e­tary portfolio of optimized, orally-administered Class I and Class II histone deacetylase (HDAC) se­lec­tive com­pounds. Alteration of HDAC reg­u­la­tion through se­lec­tive HDAC inhibition is thought to be appli­ca­ble to a broad range of diseases in­­clud­ing cancer, sickle cell disease and beta-thalassemia, and auto­im­mune and neurodegenerative diseases. Acetylon’s lead drug can­di­date, ACY-1215, is a selective HDAC6 inhibitor cur­rently in Phase 1b clin­i­cal devel­op­ment for the treat­ment of multiple myeloma. Acetylon’s scien­tif­ic founders are affiliated with the Harvard University, the Dana-Farber Cancer Institute, the Massa­chu­setts Gen­er­al Hospital, and Harvard Medical School. www.acetylon.com

Source: Acetylon Pharma­ceu­ticals.