Pharma giant Eli Lilly acquires Cambridge startup Disarm Therapeutics

Pharmaceutical giant Eli Lilly & Co. has acquired a Cambridge startup that is developing treatments for degenerative diseases such as Parkinson's, ALS and multiple sclerosis.

As part of the deal, Disarm Therapeutics received a $135 million upfront payment, though its equity holders could be eligible for up to $1.2 billion in future payments should Indianapolis-based Eli Lilly (NYSE: LLY) successfully develop new medicines following the acquisition.

Disarm was co-founded by Washington University professors Dr. Jeffrey Milbrandt and Dr. Aaron DiAntonio and was assisted in its earliest days by BioGenerator, the investment arm of St. Louis-based biotech booster BioSTL. 

Milbrandt and DiAntonio identified that a single gene, called SARM1, was leading to the degeneration of axons, the nerve fibers that serve as transmission lines for the body's neurological system. Axon degeneration is a common issue in several neurological diseases, causing sensory, motor and cognitive symptoms. Milbrandt and DiAntonio were able to develop small molecules to block SARM1 and keep the axons from dying.

Using research from Milbrandt and DiAntonio's labs, Disarm was developing drugs aimed at blocking or slowing axonal degeneration.

Disarm raised $30 million from investors in 2017, but was at the point where "we either needed to raise much more funding ourselves or work with a pharmaceutical company with the infrastructure in place to take this technology to the next level," Milbrandt said in a Washington University news release. Milbrandt is head of the school of medicine's Department of Genetics and executive director of the McDonnell Genome Institute.

"The scientific team at Disarm discovered an important and highly promising approach to combat axonal degeneration," Dr. Mark Mintun, Eli Lilly's vice president of pain and neurodegeneration research, said in a news release. "We will move quickly to develop their SARM1 inhibitors into potential medicines for peripheral neuropathy and neurological diseases, such as ALS and multiple sclerosis."