J&J antes up on a $1B gamble that Theravance has the next blockbuster JAK for Crohn’s, ulcerative colitis

Even as Gilead $GILD and AbbVie $ABBV jockey for the lead in a compelling late-stage race to develop systemic JAK1 inhibitors for inflammatory bowel disease and other ailments, J&J has moved upstream, committing to spend up to a billion dollars to see if Theravance $TBPH has found a targeted, next-gen approach that can ultimately transform treatment in the IBD field.

J&J has agreed to hand over $100 million in cash to launch a partnership with Theravance on the pan-JAK inhibitor TD-1473 and a slate of backups that leaves Janssen on the hook for 67% of the costs and a shot at the same slice of the US market, while controlling ex-US sales efforts.

Once past the mid-stage trials to come for ulcerative colitis and Crohn’s, J&J will have to decide if it wants to keep going into pivotal efforts, which will cost them a $200 million milestone payment.

Why Theravance?

In a preview of this morning’s announcement, the biotech’s executive team tells me that they’ve been working on targeted pan-JAKs that can dig into specific tissues. Their first IBD program delivered the results they were looking for in its initial foray into the clinic — triggering a handful of clinical responses in a tiny group of patients — which convinced the pharma giant that Theravance may be on to a new approach that would come without dose-limiting safety issues.

“We are working here to pick up a level of efficacy, to be able to take the dose up, reduce the safety concerns that come with systemic dosing,” says Theravance CEO Rick Winningham. And this drug, the company says, is nothing less than transformational.

AbbVie has sparked some big expectations with its data on its JAK1 ABT-494, with Gilead picking up filgotinib from Galapagos after AbbVie abandoned it in favor of their in-house drug. To highlight the potential of TD-1473, Theravance turns to Pfizer’s Xeljanz (tofacitinib) for a comparison.

Tofacitinib was originally developed for organ transplantation and then repurposed for rheumatoid arthritis, says Brett Haumann, the chief medical officer at Theravance. To work the drug has to be used systemically, and that’s where the risks come in, with immunosuppressive effects leaving patients exposed to a risk of infections while raising concerns about batting down immune cells needed to quell circulating tumor cells.

“The risk remains when you use a JAK1 or targeted JAK delivered systemically,” says Haumann. “We’re only targeting the guts. That’s where it’s delivered, penetrating into tissue. That’s the value; we can drive the dose up.”

It’s a tall order, requiring not just satisfactory efficacy and safety data, but results that can beat out a pair of the most closely-watched therapies now in the industry’s late-stage pipeline. And if successful, those drugs will be well ahead of where Theravance and J&J could be when they wrap a pivotal program — no quick and easy task.

Theravance isn’t giving out any timelines right now, other than noting the near-term launch of a Phase IIb/III for ulcerative colitis as well as Phase II for Crohn’s later this year. J&J will handle the Phase III for Crohn’s while Theravance takes on ulcerative colitis. And Haumann says he believes J&J’s clinical experience will play a key role in accelerating the work, which could have other uses in intestinal inflammatory diseases.

Theravance also has a related program in development focused on the lung. The biotech saw its shares surge 9% this morning.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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