After some painful R&D setbacks, J&J partners with Arcturus on a shot at a hep B cure
 — shares rocket up

A little over a month ago, J&J salved the wound left by its decision to abandon a multibillion-dollar late-stage hep C program by saying it was shifting its R&D attention to finding a functional cure for hepatitis B. And this morning it took a step in that direction with a tie-up with San Diego-based Arcturus Therapeutics, an RNA company that reversed its way into the public markets a few weeks ago with a deal to merge with the failed biotech Alcobra $ADHD.

With the helping hand of the Johnson & Johnson Innovation Center in California, J&J’s Janssen group will be developing nucleic acid-based drugs with the help of Arcturus’ chemistry and delivery platform technology.

Arcturus CEO Joseph Payne

Arcturus gets an unspecified upfront, R&D support and a slate of clinical and commercial milestones, which will likely be heavily back ended.

The news had a tonic effect on the microchip biotech’s new stock price, sending the price up more than 40%, even without any numbers. The company started the day with a market cap of only $35 million. The marquee J&J name now goes alongside Arcturus’ other partners, including Takeda (involving a new program for NASH) and Ultragenyx $ONCE.

J&J didn’t just abandon hep C recently, essentially conceding defeat to the two leaders in that field: Gilead and AbbVie. It also just disposed of two of its top late-stage drugs in the pipeline, marking a series of setbacks for J&J after it successfully completed the Actelion buyout.

“This new collaboration signifies an expanded relationship between Arcturus and Janssen,” said Arcturus CEO Joseph Payne.

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