Evotec AG has earned a $ 2 million milestone payment from Second Genome, Inc., a microbiome discovery and development company, for the initiation of a Phase II clinical study of SGM-1019, a first-in-class oral therapeutic for the treatment of nonalcoholic steatohepatitis (NASH). The Phase II trial of SGM-1019 has been initiated following the completion of two successful Phase I trials.

The companies have been collaborating since 2015 for the discovery and development of novel microbiome assets. As part of the collaboration, Second Genome and Evotec screened microbiome-mediated targets of interest identified by the Second Genome microbiome discovery platform with Evotec’s technology platform, chemical libraries and other preclinical capabilities. The agreement triggered an undisclosed upfront payment and Evotec is eligible for clinical and regulatory milestones as well as royalty payments related to commercialization.

Dr. Werner Lanthaler, chief executive officer of Evotec, said, “We are proud to see the progression of SGM-1019 into Phase II safety and efficacy studies at Second Genome. This advancement highlights Evotec’s ability to discover novel clinical candidates for which we receive milestones and royalties, and further demonstrates the success of Evotec’s partnered drug discovery strategy.”

Dr. Karim Dabbagh, president and chief executive officer of Second Genome, said, “The partnership with Evotec (Aptuit), that encompasses preclinical and manufacturing activities, allowed us to efficiently translate output from our microbiome discovery platform into tangible drug molecules for clinical development.”

SGM-1019 is an oral small molecule inhibitor of the P2X7 receptor, which plays a key role in activating inflammatory diseases such as NASH and inflammatory bowel disease. In clinical studies in healthy volunteers, up to twice daily dosing for 2 weeks with SGM-1019 was found to be safe and fully inhibited the P2X7 receptor in whole blood.