Zydus Sentynl signs up to $475M deal to license Mereo's phase-3 ready rare lung disease drug alvelestat in U.S.

Sentynl Therapeutics, a subsidiary of Zydus Lifesciences, announced a licensing agreement with Mereo BioPharma for the U.S. rights to alvelestat, a neutrophil elastase inhibitor that has completed phase 3 testing for alpha-1 antitrypsin deficiency-associated lung disease (AATD-LD).

Under the deal, Sentynl will pay an undisclosed upfront amount and, if it exercises the option, $40 million in upfront and R&D payments, with up to $435 million in regulatory and commercial milestone payments and tiered royalties on U.S. sales.

Mereo will retain responsibility for development and commercialization of alvelestat outside the United States and will lead a planned global phase 3 study in collaboration with Sentynl.

The agreement could bring a rare-disease therapy to the U.S. market and reflects both companies' focus on rare respiratory conditions.