Take­da drops $300M cash to kick off $1B RNAi al­liance with Ar­row­head, shoot­ing for first-in-class rare dis­ease drug

Twelve years ago, Take­da be­came the first ma­jor Asian phar­ma com­pa­ny to buy in­to Al­ny­lam’s pi­o­neer­ing RNAi plat­form with a land­mark $1 bil­lion al­liance. Two FDA ap­provals and a slew of new deals for the field lat­er, the Japan­ese drug­mak­er is mak­ing a new $1.04 bil­lion bet on a rare dis­ease pro­gram from a J&J-part­nered RNAi play­er.

Christo­pher An­za­lone

Ar­row­head is grab­bing $300 mil­lion of that up­front in ex­change for co-de­vel­op­ment and co-com­mer­cial­iza­tion rights of ARO-AAT, which is de­signed to knock down the pro­duc­tion of mu­tant al­pha-1 an­tit­rypsin pro­teins in pa­tients with AAT-as­so­ci­at­ed liv­er dis­ease.

Un­der the deal, the part­ners are go­ing for a 50/50 prof­it-shar­ing struc­ture in the US while Take­da will spear­head the glob­al com­mer­cial­iza­tion and re­serve 20-25% roy­al­ties for the biotech.

For Ar­row­head, this marks an op­por­tu­ni­ty to lean on a large com­pa­ny with ex­per­tise in the gas­troin­testi­nal space and AAT de­fi­cien­cy, ac­cord­ing to CEO Christo­pher An­za­lone, while it fo­cus­es on car­diometa­bol­ic and pul­monary in­di­ca­tions.

“We think there’s no part­ner in the world bet­ter suit­ed than Take­da to bring ARO-AAT for­ward,” he said in a con­fer­ence call, adding lat­er: “This was a no-brain­er for us.”

While there are ri­val RNAi ef­forts tar­get­ing the AATLD — with Al­ny­lam and Dicer­na ty­ing up a few months ago to pool their re­spec­tive drugs for a R&D pact — and oth­ers, like Ver­tex, ex­plor­ing al­ter­na­tive ap­proach­es, Asit Parikh, Take­da’s head of gas­troen­terol­o­gy, said there’s a lot that re­mains to be proven. In­ter­im Phase II re­sults from Ar­row­head, mean­while, sug­gest it has an “ex­quis­ite­ly tar­get­ed” drug on hand.

Asit Parikh

“I ac­tu­al­ly be­lieve that this is go­ing to be the first drug out there for pa­tients with this dis­ease and I ac­tu­al­ly think that it’s go­ing to be the strongest drug out there based on what we know so far,” he said.

Last month Ar­row­head re­port­ed that af­ter 24 weeks of treat­ment, four pa­tients saw their serum and to­tal in­tra-he­pat­ic Z-AAT de­crease by up to 93% and 95%, re­spec­tive­ly.

By treat­ing the un­der­ly­ing cause of AATLD, ARO-AAT has the po­ten­tial to help pa­tients avoid the need for liv­er trans­plan­ta­tion and oth­er co­mor­bidi­ties, Parikh added.

With the lat­est deal, all three of Ar­row­head’s lead drugs have now been part­nered, fu­el­ing a turn­around four years in the mak­ing. Am­gen signed on a $674 mil­lion pact to de­vel­op ARO-LPA, now AMG-890, tar­get­ing apolipopro­tein A for car­dio­vas­cu­lar dis­ease in 2016 short­ly be­fore Ar­row­head was slammed with a clin­i­cal hold due to non-hu­man pri­mate deaths in a tox study.

The com­pa­ny jet­ti­soned all pro­grams us­ing the im­pli­cat­ed EX1 de­liv­ery ve­hi­cle, which amount­ed to its en­tire clin­i­cal-stage pipeline then, and axed close to a third of its staff. But the new dis­cov­ery en­gine kept churn­ing out new com­pounds, and in 2018 J&J hand­ed over $250 mil­lion cash to kick-start a deal that can add up to $3.7 bil­lion, head­lined by a treat­ment for he­pati­tis B.

“This agree­ment al­so sup­ports our strat­e­gy of us­ing part­ner­ing se­lec­tive­ly to con­tin­ue to in­vest in our Tar­get­ed RNAi Mol­e­cule (TRiMTM) plat­form and the grow­ing pipeline of RNAi ther­a­peu­tics tar­get­ing di­verse tis­sue types, while fo­cus­ing our com­mer­cial or­ga­ni­za­tion on op­por­tu­ni­ties in two key ar­eas of car­diometa­bol­ic and pul­monary,” An­za­lone said in a state­ment.

Mani Fa­roohar, an an­a­lyst at SVB Leerink, called it “a pru­dent move.”

“While bulls may grum­ble that the prof­it split and roy­al­ty agree­ment lim­it po­ten­tial up­side in a blue-sky sce­nario, we see the terms of the deal as at­trac­tive, and ap­plaud man­age­ment’s de­ci­sion to lock in a floor val­ue for ARO-AAT (the sin­gle largest val­ue dri­ver in our mod­el), share some de­vel­op­ment costs, and mit­i­gate risk ahead of com­peti­tor da­ta from VRTX, DR­NA and oth­ers,” he wrote in a note.

Has the mo­ment fi­nal­ly ar­rived for val­ue-based health­care?

RBC Capital Markets’ Healthcare Technology Analyst, Sean Dodge, spotlights a new breed of tech-enabled providers who are rapidly transforming the way clinicians deliver healthcare, and explores the key question: can this accelerating revolution overturn the US healthcare system?

Key points

Tech-enabled healthcare providers are poised to help the US transition to value, not volume, as the basis for reward.
The move to value-based care has policy momentum, but is risky and complex for clinicians.
Outsourced tech specialists are emerging to provide the required expertise, while healthcare and tech are also converging through M&A.
Value-based care remains in its early stages, but the transition is accelerating and represents a huge addressable market.

Lat­est on ul­tra-rare dis­ease ap­proval; Pos­i­tive, if mixed, signs for Bio­gen's ALS drug; Clay Sie­gall finds a new job; and more

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FDA spells out how can­cer drug de­vel­op­ers can use one tri­al for both ac­cel­er­at­ed and full ap­provals

The FDA’s Oncology Center of Excellence has been a bright spot within the agency in terms of speeding new treatments to patients. That flexibility was on full display this morning as FDA released new draft guidance spelling out exactly how oncology drug developers can fulfill both the accelerated and full approval’s requirements with just a single randomized controlled trial.

While Congress recently passed legislation that will allow FDA to require confirmatory trials to be recruiting and ongoing prior to granting an accelerated approval, the agency is now making clear that the initial trial used to win the AA, if designed appropriately, can also serve as the trial for converting the accelerated approval into a full approval.

Clay Siegall, Morphimmune CEO

Up­dat­ed: Ex-Seagen chief Clay Sie­gall emerges as CEO of pri­vate biotech

Clay Siegall will be back in the CEO seat, taking the helm of a private startup working on targeted cancer therapies.

It’s been almost a year since Siegall resigned from Seagen, the biotech he co-founded and led for more than 20 years, in the wake of domestic violence allegations by his then-wife. His eventual successor, David Epstein, sold the company to Pfizer in a $43 billion deal unveiled last week.

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FDA ad­vi­sors unan­i­mous­ly rec­om­mend ac­cel­er­at­ed ap­proval for Bio­gen's ALS drug

A panel of outside advisors to the FDA unanimously recommended that the agency grant accelerated approval to Biogen’s ALS drug tofersen despite the drug failing the primary goal of its Phase III study, an endorsement that could pave a path forward for the treatment.

By a 9-0 vote, members of the Peripheral and Central Nervous System Drugs Advisory Committee said there was sufficient evidence that tofersen’s effect on a certain protein associated with ALS is reasonably likely to predict a benefit for patients. But panelists stopped short of advocating for a full approval, voting 3-5 against (with one abstention) and largely citing the failed pivotal study.

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No­vo Nordisk oral semaglu­tide tri­al shows re­duc­tion in blood sug­ar, plus weight loss

Novo Nordisk is testing higher levels of its oral version of its GLP-1, semaglutide, and its type 2 diabetes trial results released today show reductions in blood sugar as well as weight loss.

In the Phase IIIb trial, Novo compared its oral semaglutide in 25 mg and 50 mg doses with the 14 mg version that’s currently the maximum approved dose. The trial looked at how the doses compared when added to a stable dose of one to three oral antidiabetic medicines in people with type 2 diabetes who were in need of an intensified treatment.

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Ly­me vac­cine test com­ple­tion is pushed back by a year as Pfiz­er, Val­ne­va say they'll ad­just tri­al

Valneva and Pfizer have adjusted the end date for the Phase III study of their investigational Lyme disease vaccine, pushing it back by a year after issues at a contract researcher led to thousands of US patients being dropped from the test.

In a March 20 update to clinicaltrials.gov, Valneva and Pfizer moved the primary completion date on the trial, called VALOR, from the end of 2024 to the end of 2025.

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Stuart Peltz, former PTC Therapeutics CEO

Stu­art Peltz re­signs as PTC Ther­a­peu­tics CEO af­ter 25 years

Stuart Peltz, the longtime CEO of PTC Therapeutics who’s led the rare disease drug developer since its founding 25 years ago, is stepping down.

Succeeding him in the top job is Matthew Klein, who joined PTC in 2019 and was promoted to chief operating officer in 2022. In a call with analysts, he said the CEO transition has been planned for “quite some time” — in fact, as part of it, he gave the company’s presentation at the JP Morgan healthcare conference earlier this year.

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Bet­ter Ther­a­peu­tics cuts 35% of staff while await­ing dig­i­tal ther­a­peu­tic ap­proval

Digital therapeutics company Better Therapeutics announced on Thursday that it’s cutting 35% of its staff as it awaits FDA clearance for its first product.

The company, which launched eight years ago, is one of a growing group of companies seeking a digital alternative to traditional medicine. The space saw a record $7.5 billion in investments in 2021, according to Chris Dokomajilar at DealForma, with uses spanning ADHD, PTSD and other indications. However, private insurers have been slow to hop on board.