J&J hands Ar­row­head a plum $3.7B deal for hep B-plus 3 — cor­ralling a pos­si­ble game-chang­ing RNAi drug

Two years af­ter Ar­row­head Phar­ma­ceu­ti­cals $AR­WR con­ced­ed that a sub­stan­tial seg­ment of their RNAi pipeline was hope­less­ly com­pro­mised and had to be jet­ti­soned, crip­pling their stock price, the biotech is stag­ing a ma­jor come­back.

Chris An­za­lone

In the wake of an ear­ly look at pos­i­tive ear­ly re­turns for their he­pati­tis B can­di­date, J&J is step­ping up with one of their fa­mous li­cens­ing pacts, fork­ing over $250 mil­lion in cash for an up­front and eq­ui­ty stake, sea­son­ing it with a $50 mil­lion near-term plum and promis­ing much, much more for a break­through per­for­mance in a key dis­ease tar­get.

In the deal, J&J is get­ting world­wide rights to ARO-HBV, a “po­ten­tial­ly cu­ra­tive ther­a­py for pa­tients with chron­ic he­pati­tis B virus in­fec­tion.” The pact comes just weeks af­ter Ar­row­head shares rock­et­ed up on pos­i­tive da­ta from just 8 pa­tients.

But that was enough for J&J, which has a busy BD group with a long track record for scour­ing the plan­et for break­through drug can­di­dates that do great things for core dis­eases.

Here’s the break­down on the deal.

Math­ai Mam­men

Aside from the Big Phar­ma val­i­da­tion, which is worth plen­ty, Ar­row­head gets $175 mil­lion up­front plus $75 mil­lion in an eq­ui­ty stake at a pre­mi­um share price. There’s an­oth­er $3.5 bil­lion in po­ten­tial mile­stones, which has a $50 mil­lion mile­stone in goal mon­ey added for the Phase II start — which Ar­row­head had ini­tial­ly pen­cilled in for ear­ly 2019, ac­cord­ing to CEO Chris An­za­lone.

Al­most half of that mile­stone mon­ey — $1.6 bil­lion — is fo­cused sole­ly on the hep B pro­gram.

“I think we have done what no oth­er com­pa­ny could have done: go­ing from a stand­ing start to a Phase I/II read­out in less than 2 years,” says the CEO. “This is a re­al­ly good time to hand off the da­ta, go­ing for­ward to en­ter in­to a very com­pli­cat­ed, very ex­pen­sive glob­al set of stud­ies. We think that Janssen is bet­ter tooled to do that. Speed is go­ing to be crit­i­cal here; the glob­al or­ga­ni­za­tion is go­ing to be crit­i­cal.”

Mar­i­anne De Backer

What brought J&J to the ta­ble at the end?

Less than a month ago Ar­row­head saw its share price rock­et up 43% af­ter the com­pa­ny un­veiled new da­ta that it says sup­port the work they’re do­ing on an RNAi ther­a­py for he­pati­tis B. 

Their state­ment: 

The da­ta demon­strate that three month­ly dos­es of ARO-HBV led to a max­i­mum re­duc­tion in cir­cu­lat­ing HBV sur­face anti­gen (HB­sAg) of 4.0 log10, with mean re­duc­tions of ap­prox­i­mate­ly 2.0 log10 on day 85 in the 100 mg co­hort and 1.4 log10 on day 71 in the 200mg co­hort (cur­rent­ly the last com­plete da­ta point avail­able). All eight pa­tients achieved greater than 1.0 log10 re­duc­tions in cir­cu­lat­ing HB­sAg.

J&J has been on the hunt for a break­through he­pati­tis B pro­gram for years, buy­ing Novi­ra in 2015 while lat­er ink­ing pacts with Sino and Arc­turus. This deal, though, ranks as one of the biggest in the space, in­di­cat­ing that J&J wasn’t the on­ly bid­der at the ta­ble.

An­za­lone adds that J&J is al­so get­ting the rights to up to 3 ad­di­tion­al RNAi pro­grams, a help­ful en­dorse­ment from a phar­ma gi­ant that’s been known to ante up a sig­nif­i­cant amount of cash to snag the big drug can­di­dates it wants to add to its mid- and late-stage pipeline.

Across from the bar­gain­ing ta­ble, says An­za­lone, J&J was rep­re­sent­ed by R&D chief Math­ai Mam­men, who al­so bet big re­cent­ly on a BC­MA can­di­date from Chi­na’s Leg­end, and Mar­i­anne De Backer, a long­time deal­mak­er at the com­pa­ny.

J&J is well known for cre­at­ing a glob­al net­work of deal­mak­ers in­ter­est­ed in a wide va­ri­ety of de­vel­op­men­tal prod­ucts at every stage of de­vel­op­ment. But it’s the late-stage stars where it’s will­ing to go big.

That hasn’t changed.

BiTE® Plat­form and the Evo­lu­tion To­ward Off-The-Shelf Im­muno-On­col­o­gy Ap­proach­es

Despite rapid advances in the field of immuno-oncology that have transformed the cancer treatment landscape, many cancer patients are still left behind.1,2 Not every person has access to innovative therapies designed specifically to treat his or her disease. Many currently available immuno-oncology-based approaches and chemotherapies have brought long-term benefits to some patients — but many patients still need other therapeutic options.3

Pfiz­er’s Doug Gior­dano has $500M — and some ad­vice — to of­fer a cer­tain breed of 'break­through' biotech

So let’s say you’re running a cutting-edge, clinical-stage biotech, probably public, but not necessarily so, which could see some big advantages teaming up with some marquee researchers, picking up say $50 million to $75 million dollars in a non-threatening minority equity investment that could take you to the next level.

Doug Giordano might have some thoughts on how that could work out.

The SVP of business development at the pharma giant has helped forge a new fund called the Pfizer Breakthrough Growth Initiative. And he has $500 million of Pfizer’s money to put behind 7 to 10 — or so — biotech stocks that fit that general description.

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Ken Frazier, AP Images

Why Mer­ck wait­ed, and what they now bring to the Covid-19 fight

Nicholas Kartsonis had been running clinical infectious disease research at Merck for almost 2 years when, in mid-January, he got a new assignment: searching the pharma giant’s vast libraries for something that could treat the novel coronavirus.

The outbreak was barely two weeks old when Kartsonis and a few dozen others got to work, first in small teams and then in a larger task force that sucked in more and more parts of the sprawling company as Covid-19 infected more and more of the globe. By late February, the group began formally searching for vaccine and antiviral candidates to license. Still, while other companies jumped out to announce their programs and, eventually and sometimes controversially, early glimpses at human data, Merck remained silent. They made only a brief announcement about a data collection partnership in April and mentioned vaguely a vaccine and antiviral search in their April 28 earnings call.

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Mark Genovese (Stanford via Twitter)

Gilead woos fil­go­tinib clin­i­cal in­ves­ti­ga­tor from Stan­ford to lead the charge on NASH, in­flam­ma­to­ry dis­eases

With an FDA OK for the use of filgotinib in rheumatoid arthritis expected to drop any day now, Gilead has recruited a new leader from academia to lead its foray into inflammatory diseases.

Mark Genovese — a longtime Stanford professor and most recently the clinical chief in the division of immunology and rheumatology — was the principal investigator in FINCH 2, one of three studies that supported Gilead’s NDA filing. In his new role as SVP, inflammation, he will oversee the clinical development of the entire portfolio.

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Gilead re­leas­es an­oth­er round of murky remde­sivir re­sults

A month after the NIH declared the first trial on remdesivir in Covid-19 a success, Gilead is out with new results on their antiviral. But although the study met one of its primary endpoints, the data are likely to only add to a growing debate over how effective the drug actually is.

In a Phase III trial, patients given a 5-day dose of remdesivir were 65% more likely to show “clinical improvement” compared to an arm given standard-of-care. The trial, though, gave little indication for whether the drug had an impact on key endpoints such as survival or time-to-recovery. And in a surprising twist, a 10-day dosing arm of remdesivir didn’t lead to a statistically significant improvement over standard of care.

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Stephen Isaacs, Aduro president and CEO (Aduro)

Once a high fly­er, a stag­ger­ing Aduro is auc­tion­ing off most of the pipeline as CEO Stephen Isaacs hands off the shell to new own­ers

After a drumbeat of failure, setbacks and reorganizations over the last few years, Aduro CEO Stephen Isaacs is handing over his largely gutted-out shell of a public company to another biotech company and putting up some questionable assets in a going-out-of-business sale.

Isaacs —who forged a string of high-profile Big Pharma deals along the way — has wrapped a 13-year run at the biotech with one program for kidney disease going to the new owners at Chinook Therapeutics. A host of once-heralded assets like their STING agonist program partnered with Novartis (which dumped their work on ADU-S100 after looking over weak clinical results), the Lilly-allied cGAS-STING inhibitor program and the anti-CD27 program out-licensed to Merck will all be posted for auction under a strategic review process.

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Hill­house re­casts spot­light on Chi­na's biotech scene with $160M round for Shang­hai-based an­ti­body mak­er

Almost two years after first buying into Genor Biopharma’s pipeline of cancer and autoimmune therapies, Hillhouse Capital has led a $160 million cash injection to push the late-stage assets over the finish line while continuing to fund both internal R&D and dealmaking.

The Series B has landed right around the time Genor would have listed on the Hong Kong stock exchange, according to plans reported by Bloomberg late last year. Insiders had said that the company was looking to raise about $200 million.

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Federico Mingozzi (Spark)

Spark touts an­i­mal da­ta for a so­lu­tion to AAV gene ther­a­py's an­ti­body prob­lem

Among all the limitations of using an adeno-associated virus as a vector to deliver a gene — still the most established modality in gene therapy given years of trial and error and finally success — the presence of neutralizing antibodies, whether pre-existing or induced, looms large.

“When I think about the immune responses in AAV, I try to sort of layer them,” Federico Mingozzi, the CSO at Spark Therapeutics, told Endpoints News. “The antibody is the first layer. It’s the first block that you find when you’re trying to do gene transfer.”

Fangliang Zhang (Imaginechina via AP Images)

The big mon­ey: Poised to make drug R&D his­to­ry, a Chi­na biotech un­veils uni­corn rac­ing am­bi­tions in a bid to raise $350M-plus on Nas­daq

Almost exactly three years after Shanghai-based Legend came out of nowhere to steal the show at ASCO with jaw-dropping data on their BCMA-targeted CAR-T for multiple myeloma, the little player with Big Pharma connections is taking a giant step toward making it big on Wall Street. And this time they want to seal the deal on a global rep after staking out a unicorn valuation in what’s turned out to be a bull market for biotech IPOs — in the middle of a pandemic.

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