Bristol-Myers Squibb and Padlock Therapeutics have signed a definitive agreement under which Bristol-Myers Squibb will acquire all of the outstanding capital stock of Padlock, a private, Cambridge, Massachusetts-based biotechnology company dedicated to creating new medicines to treat destructive autoimmune diseases.

The acquisition will give Bristol-Myers Squibb full rights to Padlock’s Protein/Peptidyl Arginine Deiminase (PAD) inhibitor discovery program focused on the development of potentially transformational treatment approaches for patients with rheumatoid arthritis (RA). Padlock’s PAD discovery program may have additional utility in treating systemic lupus erythematosus (SLE) and other autoimmune diseases.

PADs are a family of enzymes that produce autoantigens which play an active role in the development and progression of RA and other autoimmune diseases. Inhibiting PADs offers the potential to prevent progression of autoimmune diseases early in their evolution. In identifiable high risk patients with pre- and early-RA, PAD inhibition could lead to a paradigm shift in treatment by preventing disease development and resulting joint destruction. PAD4 inhibition in combination with current standard of care therapies may increase and maintain the durable remission rates in RA patients with rapidly progressive disease.

“Targeting PAD enzymes has the potential to be one of the most innovative mechanisms for treating autoimmunity which both strengthens and accelerates our immunoscience pipeline,” said Francis Cuss, MB BChir, FRCP, executive vice president and chief scientific officer, Bristol-Myers Squibb. “By pursuing a treatment approach which may address disease progression earlier, we hope to transform the lives of patients with RA and other autoimmune diseases.”

“By targeting PADs, it may be possible to eliminate the antigens that drive autoimmunity with limited impact on the immune system, thereby creating breakthrough treatments,” said Michael Gilman, Ph.D., founder and chief executive officer, Padlock Therapeutics. “In Bristol-Myers Squibb, we found an excellent home for our program based on their deep commitment to science and developing transformational therapies. We are confident that Bristol-Myers Squibb can leverage the scientific foundation built by Padlock's founders, team, and advisors to help patients with serious autoimmune diseases.”

Bristol-Myers Squibb is building on learnings from extensive clinical and patient experience in immunoscience to seek entirely new mechanisms that are both innovative and differentiated not only for RA, but other immune-system disorders where significant unmet medical need remains. The company has a strong early clinical and discovery immunoscience pipeline which includes several novel compounds that offer first-in-class and a best-in-disease opportunities targeting long-term remission.

The transaction includes upfront and near term contingent milestone payments of up to $225 million and additional contingent consideration of up to $375 million upon the achievement by Bristol-Myers Squibb of certain development and regulatory events. The transaction has been approved by the boards of directors of both companies and by the stockholders of Padlock. Bristol-Myers Squibb and Padlock anticipate the transaction will close during the second quarter of 2016.