Shionogi has agreed to acquire clinical-stage biotechnology company Tetra Therapeutics in a deal valued at around $500m.

The deal value of $500m will be based on the achievement of certain predetermined regulatory and commercial milestones.

The transaction will provide Shionogi with global rights to Tetra’s complete portfolio of compounds, including BPN14770, to treat brain disorders associated with cognitive and memory deficits.

Both firms first signed collaboration and investment agreement in 2018, and they have expanded alliance at the starting of this year to develop and commercialise BPN14770 to treat Alzheimer’s disease (AD), Fragile X syndrome (FXS) and other indications.

Tetra is currently carrying out a Phase II study in FXS, as well as recently completed a phase II study in AD in the US.

Tetra Therapeutics chairman and CEO Dr Mark Gurney said: “With over a decade of research, development and investment, Tetra has demonstrated the unique ability of allosteric inhibitors of phosphodiesterase-4D (PDE4D) to deliver disease-modifying potential in central nervous system (CNS) disorders.”

The BPN14770 is a novel therapeutic agent, which selectively inhibits phosphodiesterase-4D to improve early and late stages of memory formation.

The advanced mechanism of action is believed to enhance cognitive and memory function in CNS disorders such as FXS, AD and other dementias such as learning/developmental disabilities and schizophrenia.

According to the company, the preclinical animal models demonstrate that BPN14770 has the potential to boost the maturation of connections between neurons that are impaired in patients with FXS and protect connections between neurons that may be lost in patients with AD.

The company already secured orphan drug designation from the US Food and Drug Administration (FDA) for BPN14770 to treat adults with FXS.

Shionogi president and CEO Dr Isao Teshirogi said: “Tetra’s deep level of drug discovery know-how in the CNS area will help us to solve for the cognitive disorders our ageing population is facing, and we believe we are well-positioned to bring BPN14770 to patients in need.”

In November 2018, Shionogi secured approval from the FDA for its Fetroja (cefiderocol) to treat complicated urinary tract infections (cUTI) in adult patients with limited or no alternative treatment.