Idun Pharma: From $300 Million to $30 Million in Five Years

Digital media companies like AOL and Yahoo get lots of flack for buying VC-backed startups at high valuations, and then later dumping them for just pennies on the dollar. Well, sometimes it also happens in the biotech world.

Take the case of Idun Pharmaceuticals, developer of drugs focused on a type of cell death known as apoptosis. Idun raised around $100 million in VC funding between 1993 and 2005, at which point it was sold to Pfizer for around $298 million. Solid double for the VCs, and part of Pfizer’s plan to use M&A to help supplant expiring patents.

The Idun management team left a few months later to form Conatus Pharmaceuticals, a drug startup focused on inflammation and liver disease. It raised around $30 million — all new investors, save for Aberdare Ventures — and today announced that has bought Idun back from Pfizer.

Conatus CEO Steve Mento declined to say how much his company is paying, except that “we were able to acquire Idun without having to raise additional capital.” Now maybe Mento and friends put up some of their personal wealth, but it seems to me that the price-tag must be well under $30 million (plus future earn-outs).

Or, to put it another way, Conatus today paid less than 10% of what Pfizer paid for Idun five years ago.