Transaction Case Studies

Sell-Side Process Leading to US License Agreement

Situation Assessment

  • CymaBay Therapeutics (NASDAQ: CBAY) is a publicly held clinical-stage biopharmaceutical company developing therapies to treat specialty and orphan diseases with high unmet medical need.
  • CymaBay engaged Locust Walk to advise the Company in securing a strategic partner for its lead compound, arhalofenate.
  • Arhalofentae is an anti-inflammatory uricosuric drug for the treatment of gout. Arhalofenate is Phase 3 ready and is the only drug to decrease flares as well as serum uric acid associated with gout. It is the first compound in a new class of gout therapy that CymaBay refers to as Urate Lowering Anti-Flare Therapy (ULAFT).
  • CymaBay sought a partner for continued development and commercialization of arhalofenate in the US.

Key Activities

  • Locust Walk engaged in a sell-side process involving a comprehensive outreach to prospective partners
  • Completed a commercial assessment which refined previous product positioning and was a critical driver of deal discussions
  • Developed detailed revenue forecasts and valuation models for arhalofenate that informed negotiation of term sheet economics
  • Advised CymaBay throughout the process to appropriately pace partner discussions and channel activity toward closing
  • Played a key role advising CymaBay during contracting of the definitive agreement and negotiating both economic and non-economic business terms

Successful Outcome

  • US rights to arhalofenate were successfully licensed to Kowa Pharmaceuticals for $15M in upfront and near-term payments as well as $190M in payments based upon achievement of specific development and sales milestones
  • CymaBay stock (NADAQ: CBAY) increased 33% following announcement of the deal

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CLIENT: CymaBay Therapeutics


Sell-Side Process Leading to US licensing agreement for arhalofenate