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Acetylon gets $100m investment from drug giant

Celgene has option to acquire Acetylon

Acetylon Pharmaceuticals, a Boston developer of small-molecule drugs for multiple myeloma and other cancers, plans to announce Monday a $100 million investment by the biotech giant Celgene Corp. that could lead to a $1.6 billion acquisition.

Acetylon, whose founders are affiliated with the Dana-Farber Cancer Institute, Harvard Medical School, and Massachusetts General Hospital, plans to use some of the money to fund continuing development of its leading drug candidate, ACY-1215, which targets myeloma. Three other cancer treatments also are in the works.

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In exchange for the investment, Celgene will receive an exclusive option to buy Acetylon for between $500 million and $1.6 billion, depending on future milestones. The new investment follows a $15 million equity stake Celgene took in Acetylon in 2012.

Negotiations on the deal, which began three months ago, were prompted by Acetylon’s recent publication of promising results in a Phase 1b clinical trial of ACY-1215, said chief executive Walter C. Ogier.

“We’re seeing what we had been expecting to see and hoping to see,” Ogier said of the trial. “The safety and toxicity appear to be very good and, on top of that, we’re seeing very high numbers of responses in patients. That’s been very exciting.”

Celgene, based in Summit, N.J., has been growing rapidly. It reported second-quarter earnings of $1.56 billion last week, a 17 percent increase over the same period last year, and now has a market capitalization of more than $58 billion.

Its stock has doubled over the past year, closing Friday at $143.94.

Celgene’s deal with Acetylon is its eighth with a Boston-area biotech in the last two years.

Mark Alles, Celgene’s global head of hematology and oncology, said Acetylon’s line of drug development “has shown significant promise.”

“The expansion of our relationship with Acetylon from our original equity investment to this exciting, strategic collaboration demonstrates our belief that Acetylon’s” drug candidates, Alles said, “have the potential to meaningfully improve clinical outcomes for patients with a variety of diseases.”

Ogier stressed that Acetylon has a lot of work ahead, noting that some companies undertaking similar efforts have failed in clinical trials, but he said he is confident that the relationship with Celgene will lead to a purchase.

“I think the parties fully intend that there will be a marriage down the road,” he said. “It’s our hope, certainly, that we’ll continue to see very good results in clinical trials, and I think that will drive us toward the exercise of the option, to have them acquire Acetylon as part of the Celgene family.”

Callum Borchers can be reached at callum.borchers@globe.com.

Clarification: An earlier version of this story misstated the prospective value of Acetylon Pharmaceuticals’ potential purchase by Celgene Corp. The total value could be $1.6 billion or more.

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