Swapping stock and cash, Ionis turns to closely-controlled Akcea for a deal on spurned drug inotersen

Last year, after GlaxoSmithKline unceremoniously dumped its partnership with Ionis on inotersen and a follow-up rare disease therapy, the chief business officer at the biotech said that she was in talks with multiple potential partners interested in taking GSK’s place.

Sarah Boyce

Today, Ionis unveiled the winning player at the bargaining table: Akcea, an affiliate of Ionis, which owns a controlling interest in its stock. And Sarah Boyce, the CBO in charge of the talks at Ionis, is now transferring over to become president of Akcea as it preps a likely commercial launch in the US and Europe.

Akcea is also getting Ionis’ second-gen drug for hereditary TTR amyloidosis, the experimental IONIS-TTR-LRx.

Together, they will most probably square off against Alnylam’s rival patisiran, which a lineup of analysts believe is poised to handily carve out the largest share of the market.

Money or stock is exchanging hands — in a manner of speaking, as Ionis carries Akcea on its books, according to its recent annual report. Akcea is paying Ionis $150 million and Ionis is buying $200 million in Akcea shares, boosting its stake in the company from 68% to 75% as the money stays in the family.

Approvals in the US and European markets will trigger payments of $50 million and $40 million to Ionis. Akcea can use stock in lieu of cash, if it chooses, to pay for the upfront and fees, which would further swell Ionis’ stake in the company. And there’s another $1.3 billion in prospective milestones outlined for marketing goals, while Ionis gets the lion’s share of a 60/40 split with its affiliate.

Investors clearly saw it as a boon for Akcea and a disappointment for Ionis. Akcea’s stock went up 23% and Ionis slumped 6% on the news. But in this case, Ionis wins either way.

Just how much their deal is worth, though, will depend a lot on the prospective launch of Alnylam’s patisiran, which has better efficacy data. Akcea, where Ionis CEO Stanley Crooke sits on the board, is adopting their marketing stance from Ionis.

Paula Soteropoulos, Akcea CEO

As part of their due diligence for the deal, Akcea CEO Paula Soteropoulos told me, she came to the conclusion that inotersen is “a very transformative drug for patients. In the clinical trial, inotersen showed a significant impact in the disease and impact on life.” Patients can dose themselves at home, anytime and anyplace.

“It gives them control of their life back,” she adds, “the disease robs patients of their ability to lead a normal life.” And that will differentiate the drug from patisiran.

After I queried Soteropoulos on the close ties between the two companies during an interview, a spokesperson followed up with a statement.

Ionis conducted a thorough process to evaluate potential partners and types of transaction for inotersen.  As you might expect, interest in inotersen took a variety of forms, from larger companies that wanted global rights with no Ionis participation to more regional transactions; from companies with substantial rare disease expertise to those with less.  We had strong interest from a range of companies and received multiple offers.

After a thoughtful evaluation of all the possibilities, we arrived at the conclusion that this transaction with Akcea met all three of our key partnering goals: to rapidly deliver inotersen to the patients who desperately need this treatment, to maximize the commercial success of inotersen, and to optimize our commercial participation in our TTR franchise.  The transaction has the added benefit of being transformative for Akcea which is now positioned to launch two drugs for significant rare diseases this year, substantially increasing the breadth of Akcea’s operations and capabilities.

The deal gives Akcea a new drug to launch alongside their drug volanesorsen, part of the pipeline the biotech got when it spun out of Ionis. And the CEO says that adding inotersen to that schedule makes sense, given the commercial infrastructure they’ve been building. She added that a rare disease drug like inotersen would typically require a sales group of about 100 in the US, with European staffing breaking out on an as needed, country-by-country basis.

Ionis’ PDUFA date is July 6, a little more than a month ahead of the patisiran action date.

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

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