As Acthar troubles persist, Mallinckrodt invests in RNAi and Silence Therapeutics
A day after it was forced to ax an amyotrophic lateral sclerosis study testing its controversial Acthar gel, Mallinckrodt is investing in RNA technology to target rare diseases by enlisting Silence Therapeutics as a partner.
Silence Therapeutics, akin to others in its field such as Alnylam who pioneered the first RNA interference therapy last August, is betting on the promise of silencing the expression of disease-causing proteins. The landmark discovery of RNA interference was rewarded with a Nobel prize in 2006. Though founded in 1994, the London biotech changed course to champion RNA therapeutics in 2012 — and is still in the preclinical phases with its slate of experimental drugs.
The companies are set to co-develop RNAi therapeutics engineered to inhibit the complement cascade — a group of proteins that are involved in the immune system and that play a role in the development of inflammation.
As part of the agreement, Mallinckrodt is getting an exclusive global license to Silence’s C33 complement asset, SLN500, as well as options to license up to two additional complement-targeted assets. The preclinical therapy, SLN500, allows the companies to target a range of rare diseases as well as conditions of immune dysregulation.
Silence is in charge of preclinical activities, as well as Phase I studies — and Mallinckrodt $MNK will be responsible for further clinical development as well as commercialization.
Under the deal, Silence secures an upfront payment of $20 million and is eligible to receive up to $10 million in research milestones for SLN500 and for each optioned asset, in addition to funding for Phase I clinical development including GMP manufacturing. The SLN500 collaboration also provides for potential added clinical and regulatory milestone payments of up to $100 million, commercial milestone payments of up to $563 million, in addition to royalties. Should Mallinckrodt decide to license any other assets, Silence could receive up to $703 million in similar milestone payments per asset, in addition to royalties.
Separately, Staines-upon-Thames-based Mallinckrodt also injected $5 million into Silence Therapeutics, in exchange for about 5.1 million shares from its partner.
The more than 150-year-old company has a suite of specialty medicines and generic treatments in its arsenal of drugs, but its Acthar gel — which it acquired in 2014 with the takeover of Questcor — accounted for a little over a third of Mallinckrodt’s roughly $3.2 billion in net sales last year.
The products list price has been hiked from $40 per vial in 2001 to a whopping $38,892 currently. Extracted from the pituitary glands of slaughtered pigs, it’s manufactured essentially the same way as it was in the 1950s, and is cleared for use in 19 indications. The drugmaker has therefore long elicited the ire of regulatory agencies for its marketing practices in relation to Acthar.
In May, Mallinckrodt was dealt a heavy blow when the Centers for Medicare & Medicaid Services decided to revert to the base date average manufacturer price on Acthar from the rate used since 2013, which was prior to the company’s acquisition of Questcor. “(T)he shift will substantially raise the calculated rebate such that the net realized price on Acthar sales to Medicaid beneficiaries will fall from the current ~$30k+ per vial to ‘dollars’ per vial. With Medicaid representing ~10% of Acthar sales, the shift if put into effect would impact annual sales by ~$100 million per year. In response, MNK has filed for injunctive relief under the Administrative Procedure Act (APA) where the timeline is expected to be expedited; hence a final ruling should at some point in the 2Q-3Q timeframe,” Jefferies analysts wrote in a note.