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Biotech in $3.7B Licensing Deal for Hepatitis-B

Hepatitis-B virus

Hepatitis-B virus (CDC.gov, Pixnio)

4 Oct. 2018. A biotechnology company developing therapies that silence the actions of disease-causing genes is licensing its treatment program for hepatitis-B to Janssen Pharmaceuticals, part of Johnson & Johnson. The agreement could bring Arrowhead Pharmaceuticals in Pasadena, California as much as $3.7 billion if all aspects of the deal are completed.

Arrowhead’s technology is based on ribonucleic acid or RNA interference (RNAi), a natural process to silence the expression of genes causing disease. RNA is genetic material related to DNA that the body uses to transmit genetic information to cells and synthesize proteins. RNA interference targets specific genes, making it a potentially powerful therapeutic technique, while minimizing damage to other genes, thus limiting side effects.

The company delivers RNAi molecules to the targeted genes using its Targeted RNAi Molecule, or Trim, platform. That platform designs RNA chemistries for specific ligand, or binding targets, then combines the targeting chemistries with molecular enhancements for linking and stabilization. Arrowhead says that while the design is relatively simple, the therapies are powerful and persistent enough to be given at monthly or less frequent intervals, as injections under the skin.

One of the company’s more advanced programs is a treatment for chronic hepatitis-B code-named ARO-HBV. Hepatitis-B is a life-threatening viral infection of the liver, which if it becomes chronic, can cause cirrhosis — scarring of liver tissue — and liver cancer. The hepatitis-B virus is spread through blood or contact with other bodily fluids, such as from mother to child in pregnancy. World Health Organization says hepatitis-B is a global public health problem affecting some 257 million people now living with the disease and causing some 887,000 deaths in 2015. While a vaccine is readily available to prevent hepatitis-B, there are now no complete cures.

Under the agreement, Janssen gains an exclusive worldwide license to ARO-HBV, but can extend the deal beyond that hepatitis-B to other targets. Arrowhead will continue conducting its early- and intermediate-stage clinical trial of ARO-HBV evaluating the safety and chemical activity of the treatments among healthy volunteers and people with the disorder. Janssen will be responsible for all further development and commercialization of the treatments. Janssen also has the option to select up to 3 more targets for RNA interference treatments from the Trim platform.

Arrowhead is receiving an initial payment from Janssen of $175 million, and Janssen is also taking a $75 million equity stake in Arrowhead. In addition, Arrowhead is eligible for as much as $1.6 billion in milestone payments for development of ARO-HBV, including $50 million designated for an intermediate-stage study of the treatment. Moreover, Arrowhead will be eligible for another $1.9 billion should Janssen pursue the 3 additional targets for RNA interference treatments.

Christopher Anzalone, Arrowhead’s president and CEO notes in a company statement that the agreement with Janssen, “represents further validation of the Trim platform and provides an important opportunity to create up to three additional novel medicines by leveraging Arrowhead’s speed and expertise in RNAi drug discovery and Janssen’s clinical development and commercial capabilities.”

The Arrowhead-Janssen deal follows a similar licensing agreement last month, reported in Science & Enterprise, between Precision Biosciences and the biopharmaceutical company Gilead Sciences, for Precision Biosciences’ genome-editing treatments for hepatitis-B.

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Disclosure: The author owns shares in Johnson & Johnson.

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