Cyclerion Therapeutics, Tisento close asset purchase agreement

Cyclerion Therapeutics and Tisento Therapeutics announced the closing of the previously disclosed asset purchase agreement. Tisento is launching with an $81M Series A financing to support its development of the Phase 2 soluble guanylate cyclase stimulator zagociguat in MELAS and other genetic mitochondrial diseases, as well as the company’s advancement of additional assets for serious diseases with unmet need. Zagociguat is a first-in-class, brain-penetrant sGC stimulator that modulates the nitric oxide-cyclic guanosine monophosphate pathway, a fundamental cell-signaling pathway, and has shown potential to treat both central nervous system and peripheral symptoms of mitochondrial diseases. Phase 2a clinical data, generated by Cyclerion, showed rapid improvements in disease-associated biomarkers in patients with MELAS who received zagociguat for 28 days. In the study, zagociguat exhibited an excellent safety profile, exposure in the CNS and throughout the body consistent with once-daily oral dosing, and improvements across key domains of the disease pathophysiology including neuronal function, mitochondrial function, cerebrovascular hemodynamics, and inflammatory processes. Major Cyclerion shareholders participated in Tisento’s Series A financing, including Invus, Peter Hecht, Polaris, and others. They are joined in the Tisento investor syndicate by Sanofi Ventures, Venrock, J. Wood Capital, and others. In the transaction, Tisento acquired from Cyclerion zagociguat and CY3018, a CNS-targeted sGC stimulator in IND-enabling studies. Cyclerion received 10 percent equity ownership in Tisento with anti-dilution protection through $100 million in post-money valuation, as well as the right to purchase additional Tisento equity in the future. The Tisento equity ownership provides Cyclerion shareholders with the opportunity to benefit from future Tisento value creation without further financial or operational obligations for the Tisento assets. In addition, Cyclerion received a $10.4 million cash payment, consisting of an $8 million upfront payment and reimbursement for certain employee and development expenses related to zagociguat and CY3018 for the period between the signing and closing of the transaction. In conjunction with the asset sale, Peter Hecht invested $5 million in Cyclerion.