BMS to buy start-up Padlock

Bristol-Myers Squibb will pay up to $600 million to acquire Padlock Therapeutics, a biotech firm developing small molecules for autoimmune diseases.

Padlock, which C&EN named one of 10 Start-ups to Watch last year, takes a contrarian approach to autoimmunity. Whereas drug development for diseases such as arthritis and lupus mostly focuses on dampening the activity of an immune system gone awry, Padlock believes immune cells are actually responding to normal enzymes called protein arginine deiminases (PADs) that have escaped their cellular homes.

The biotech firm is developing small molecules to block the activity of PADs, which are responsible for changing an arginine to a citrulline on proteins found inside cells.

Padlock has been in expansion mode. Launched in 2014 as a virtual biotech that relied on the contract research organization Evotec to do key chemistry work, the company recently set up its own labs and brought on a cadre of scientists.

Although Padlock had been in talks with investors to raise more money, its PAD-blocking small molecules also intrigued potential drug company partners. Ultimately, BMS, which has a healthy pipeline of small molecules and biologics for autoimmune diseases, won out.

“Two years ago in the frothy biotech market, we might have made a different choice,” says Padlock CEO Michael Gilman. But the deal with BMS gives investors, who put $23 million in the company’s first round of financing, a healthy return while leaving the programs and researchers in good hands, Gilman says.