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.

UP­DAT­ED: Roche bags 'break­through' an­ti-fi­bro­sis drug in $1.4B biotech buy­out deal

Roche is snapping up a “breakthrough” anti-fibrotic drug in a $1.4 billion buyout.

The pharma giant announced Friday that it is acquiring Promedior, primarily to get its hands on PRM-151, a recombinant form of human pentraxin-2 (PTX-2) protein that has nailed down mid-stage clinical data on idiopathic pulmonary fibrosis and demonstrating its potential for a range of fibrotic conditions.

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Amarin emerges from an ex­pert pan­el re­view with a clear en­dorse­ment for Vas­cepa and high odds of suc­cess when the FDA weighs in for­mal­ly

Several FDA experts who gathered Thursday to consider the landmark approval of Vascepa to reduce cardio events in an at-risk population voiced their unease about various aspects of the efficacy and safety data, or ultimately the population it should be used to treat. But the overwhelming belief that the data pointed to the drug’s benefit and clearly outweighed risks carried the day for Amarin.

The panel voted unanimously (16 to 0) to support the company’s positive data presentation — backing an OK for expanding the label to include reducing cardio risk. The vote points Amarin $AMRN down a short path to a formal decision by the FDA, with the odds heavily in its favor. Chances are the rest of the questions about the future of this drug will be hashed out in the label’s small print.

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No­var­tis spin­out’s first an­ti-ag­ing PhI­II is a flop, so now they’ll turn to Parkin­son’s chal­lenge as shares wilt

Novartis spinout resTORbio is grappling with the collapse of its lead clinical program this morning — an anti-aging R&D failure that will badly damage their rep in the field.

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No­var­tis scores its lat­est FDA OK — this time for a new sick­le cell dis­ease drug picked up in a $665M deal

Novartis’ decision to buy Oklahoma-based biotech Selexys 3 years ago for up to $665 million has paid off with an FDA approval today.

Blessed with the FDA’s breakthrough drug designation for a speedy review, the pharma giant has pinned down an approval for crizanlizumab, a new therapy designed to reduce the frequency of painful incidents of vaso-occlusive crises among sickle cell disease patients 16 or older.

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As­traZeneca gains EU nod for di­a­betes triple; Am­gen and Duke launch re­al-world PC­SK9 ob­ser­va­tion­al study

→ Weeks after winning EU approval to start marketing dapagliflozin as Forxiga, AstraZeneca has racked up another OK for a triplet combo involving the SGLT2 diabetes drug. Named Qtrilmet, the pill combines Forxiga with the DPP-4 inhibitor Onglyza (saxagliptin) and the bedrock drug metformin in a modified-release format. That 3-in-1 approach proved superior in reducing average blood glucose levels to a number of other dual combinations across 5 Phase III trials, including Forxiga plus metformin, Onglyza with metformin, or glimepiride with metformin.

Five drugs, in­clud­ing two No­var­tis ther­a­pies, win EMA en­dorse­ment

As is custom, an EMA panel on Friday issued its weekly recommendations on marketing applications submitted by drug developers. This week, the agency backed the use of five new therapies — including two Novartis drugs — but issued no negative reviews.

Novartis’ S1P drug for relapsing forms of multiple sclerosis (MS) drug, Mayzent (known chemically as siponimod), which was approved by the FDA in March — has been given the nod by the EMA. The Swiss drugmaker already sells its other MS drug, Gilenya, in both regions.

Atom­wise's X-37 spin­out gets $14.5 mil­lion to launch AI dis­cov­ery ef­forts

The folks behind Atomwise’s spinout X-37 like to think in cosmological metaphors, and you can think of their AI drug development model as probes sent into space from a central station. That station just got $14.5 million in Series A funding from DCVC Bio, Alpha Intelligence Capital and Hemi Ventures to back those missions.

X-37 uses Atomwise’s AI platform to identify drug targets and – unlike the parent company, which largely sticks to computers  – bring those into a wet lab and preclinical testing.  In addition to AI professionals, it’s led in by part by drug developers from Velocity Pharmaceutical Development.

Ab­bott Lab­o­ra­to­ries CEO Miles White pass­es ba­ton down to suc­ces­sor; Lon­za CEO Marc Funk hits the ex­it

→ Abbott Laboratories has named a successor to CEO Miles White after he announced that he was stepping down in March after 21 years of service. Robert Ford, the company’s COO and president, will take the helm. Ford is known for his work in the $25 billion merger between St. Jude Medical into Abbott in January 2017. White will remain with the company as executive chairman of the board. 

→ After snapping up Novartis’ Swiss facility, Novartis Center of Excellence, in July, Lonza has announced that their CEO, Marc Funk, is hitting the exit for “personal reasons.” Funk has been the CEO of the company for less than a year — brought onto the company back in March. In the meantime, chairman Albert Baehny will serve as interim CEO. 

UCB adds on more pos­i­tive PhI­II da­ta for IL-17A/17F in­hibitor bimek­izum­ab, clear­ing a path to the FDA

A month after posting positive top-line data from their first Phase III trial of the IL-17A/17F inhibitor bimekizumab, Belgium’s UCB says they’ve added more upbeat results from their second late-stage test in moderate-to-severe plaque psoriasis.

That leaves the company on track for regulatory submissions in the middle of next year, says CMO Iris Loew-Friedrich.
Their drug beat out a placebo on the co-primaries — a 90% improvement in PASI 90 (the Psoriasis Area and Severity Index) and Investigator Global Assessment (IGA) response of clear or almost clear (IGA 0/1) at week 16, compared to placebo. Investigators also boasted of hitting some key secondaries.
UCB is angling to enter an increasingly crowded market space.
In their first of 3 Phase III studies for bimekizumab, researchers touted top-line wins on statistically significant results on clearing plaque psoriasis, including a victory over J&J’s IL-23 contender Stelara on key endpoints. The drug targets both IL-17A and IL-17F, a modification on the IL-17A strategy laid out for Taltz (Eli Lilly) and Cosentyx (Novartis). And the new group also includes J&J’s Tremfya and AbbVie’s Skyrizi.

Social image: UCB