No­var­tis adds to its car­dio pipeline with $1.65B Io­n­is pact

Akcea CEO Paula Soteropou­los

No­var­tis is mak­ing a big bet on two of Io­n­is’ car­dio drugs.

The phar­ma gi­ant $NVS is hand­ing over $225 mil­lion in near-term pay­ments, split be­tween fees, an up­front and an eq­ui­ty stake, and promis­ing $1.13 bil­lion more in de­vel­op­ment and com­mer­cial­iza­tion mile­stones for a world­wide op­tion and col­lab­o­ra­tion pact on AKCEA-APO(a)-LRx and AKCEA-APOC­I­II-LRx — han­dled by Io­n­is’ sub­sidiary Akcea.

That’s $75 mil­lion up­front, $100 mil­lion in eq­ui­ty now at $61.30 a share and $50 mil­lion more for stock in 18 months. And an­oth­er $300 mil­lion is up for grabs if No­var­tis agrees to take the li­cense op­tions.

Shares of Io­n­is jumped 7%.

For No­var­tis, the deal marks an­oth­er op­por­tu­ni­ty to build up its all-im­por­tant car­dio port­fo­lio as the ear­ly sales for En­tresto con­tin­ue to dis­ap­point an­a­lysts. For Io­n­is $IONS, it’s a big win com­ing fast on the heels of an ap­proval for Spin­raza, a new drug they ad­vanced and which Bio­gen is spear­head­ing for spinal mus­cu­lar at­ro­phy at a con­tro­ver­sial price of $750,000 for the first year.

Io­n­is has been on a roller coast­er ride for the past year, af­flict­ed by wor­ries over ad­verse events but al­so backed by in­vestors who be­lieve that its RNAi plat­form can de­liv­er sig­nif­i­cant new ther­a­pies for tough dis­eases. Car­dio in­di­ca­tions, though, are among the tough­est con­di­tions to get a new ap­proval on, as reg­u­la­tors re­main wary about any po­ten­tial threat to large groups of pa­tients.

AKCEA-APO(a)-LRx tar­gets lipopro­tein(a) or Lp(a), which has been linked to car­dio­vas­cu­lar dis­ease. An ab­sence of the pro­tein ApoC-III, mean­while, has been tied to low­er triglyc­erides and low­er car­dio risks. Both of these tar­gets face an up­hill climb in Phase III, where reg­u­la­to­ry agen­cies will de­mand huge pa­tient groups to prove ef­fi­ca­cy as well as safe­ty.

In the next step, Akcea will run two Phase II stud­ies to set up a piv­otal tri­al for each. If No­var­tis takes the op­tion af­ter the Phase II, they will pay $150 mil­lion as a li­cens­ing fee on each. And the phar­ma gi­ant will be re­spon­si­ble for the Phase III stud­ies.

Up to $315 mil­lion and $265 mil­lion in de­vel­op­ment and reg­u­la­to­ry mile­stone pay­ments are set aside for AKCEA-APO(a)-LRx and AKCEA-APOC­I­II-LRx as well as up to $285 mil­lion and $265 mil­lion in com­mer­cial­iza­tion mile­stone pay­ments, for each drug.

In ad­di­tion, Akcea will have co-com­mer­cial­iza­tion rights for any drug that hits the mar­ket.

Said Akcea CEO Paula Soteropou­los:

This strate­gic part­ner­ship al­lows us to move more rapid­ly to Phase 3 car­dio­vas­cu­lar out­comes stud­ies with both ther­a­pies than our orig­i­nal de­vel­op­ment plan.  Our abil­i­ty to ben­e­fit from No­var­tis’ glob­al com­mer­cial­iza­tion re­sources and com­ple­ment them with Akcea’s spe­cial­ized sales force fo­cused on lipid spe­cial­ists should al­low us to max­i­mize the com­mer­cial po­ten­tial of each drug.

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Just ahead of GlaxoSmithKline’s Q2 update on Wednesday, science chief Hal Barron is making the rounds to talk up the pharma giant’s late-stage strategy as the top execs continue to woo back a deeply skeptical investor group while pushing through a whole new R&D culture.

And that’s not easy, Barron is quick to note. He told the Financial Times:

I think that culture, to some extent, is as hard, in fact even harder, than doing the science.

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Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

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Until now.

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