Zydus Lifesciences' wholly owned subsidiary Sentynl Therapeutics has entered into an option and licence agreement with Mereo BioPharma for alvelestat, an experimental treatment for Alpha-1 Antitrypsin Deficiency-Associated Lung Disease (AATD-LD). According to reports from CNBC TV18, under the agreement, Sentynl will have the exclusive option to acquire a licence to commercialise alvelestat for AATD-LD in the US, while Mereo will retain commercial rights in the rest of the world. Sentynl will also receive global manufacturing rights for the drug.
Alvelestat is an oral neutrophil elastase inhibitor being prepared for Phase 3 development. As reported by CNBC TV18, if approved, it could become the first oral treatment for AATD-LD, which is estimated to affect between 50,000 and 80,000 people in the US. The companies expect the Phase 3 development programme could begin in early 2027. Alvelestat has received Orphan Drug Designation for AATD-LD from both the US Food and Drug Administration and the European Commission, and has also received Fast Track designation from the FDA. The drug's development is supported by findings from the Phase III SMART trial (MK-1654-007).
According to CNBC TV18, Mereo will receive a non-refundable option fee from Sentynl. If Sentynl exercises the option, Mereo will be eligible to receive up to $40 million in upfront and research-and-development payments through the filing of a New Drug Application, as well as double-digit tiered royalties on US net sales of alvelestat. Mereo will lead the global Phase 3 study and regulatory interactions until the study is completed, while during the option period, the companies will work together to refine the Phase 3 study design and advance manufacturing activities.
As reported by CNBC TV18, Zydus Lifesciences shares closed 6.43% higher at ₹1,191 on the NSE on Tuesday following the announcement. The significant market response reflects investor confidence in the potential commercial value of the partnership and the drug's position as a potential first-to-market treatment for this rare genetic respiratory disease.
