Eli Lilly and Co.’s definitive agreement to acquire privately held Disarm Therapeutics Inc. brings Cambridge, Mass.-based Disarm $135 million up front and as much as $1.225 billion in additional future payments for potential development, regulatory and commercial milestones if Lilly successfully develops and commercializes therapies tied to the agreement.

The deal brings Lilly SARM1 inhibitors designed to treat peripheral neuropathy and other neurological diseases such as amyotrophic lateral sclerosis and multiple sclerosis (MS). SARM1 is part of a fundamental pathway driving axonal degeneration. The inhibitors, created to prevent axon loss, are in preclinical development.

In October, Disarm reported preclinical data at the Society for Neuroscience meeting in Chicago showing small-molecule inhibitors of SARM1 protect axons in both in vitro and in vivo models of axonal degeneration. Protection from axonal degeneration was measured using neurofilament light chain, a downstream biomarker of axonal degeneration that can be detected in blood.

Further preclinical data from Disarm demonstrated that deleting SARM1 has a robust axonal-protective effect in experimental autoimmune encephalomyelitis (EAE), a well-accepted animal model of MS. Data from the EAE model showed SARM1 homozygous and heterozygous gene deletion markedly attenuates the increase in plasma neurofilament light (NfL), a biomarker of axonal degeneration and disease progression in MS. The magnitude of SARM1 effect on NfL was gene-dosage dependent. Axonal protection through SARM1 deletion led to a statistically significant reduction in demyelination via histological examination.

Commercial activity in the SARM1 space so far appears to be minimal, with Disarm and Nura Bio Inc. the only companies to publicly disclose work to develop medicines targeting the enzyme.

Disarm raised $30 million in series A financing in September 2017, led by Atlas Venture, with co-investors Lightstone Ventures and Abbvie Ventures. In January, the company appeared to be readying to raise more, with the hiring of Scott Holmes as chief financial officer, who had previously held that role at Kiadis Pharma NV.

Disarm's scientific co-founders, Jeffrey Milbrandt and Aaron DiAntonio of Washington University in St. Louis, reported in the March 2017 issue of Neuron that the SARM1 protein possesses an enzymatic activity that centrally drives axonal degeneration.