A major drugmaker in Japan has become the latest to make a significant bet on drugs that treat disease by using RNA to block gene expression.
Osaka-based Takeda Pharmaceutical and Pasadena, California-based Arrowhead Pharmaceuticals said Thursday that they would partner on Arrowhead’s ARO-AAT, an RNA-interference, or RNAi drug in development for alpha-1 antitrypsin-associated liver disease, also known as AATLD.
Under the terms of the deal, Arrowhead is eligible for up to $1.04 billion, which includes an upfront payment of $300 million, as well as regulatory and milestone payments of up to $740 million. The two companies will develop and commercialize the drug under a 50-50 profit-sharing structure in the U.S., while Takeda will in-license exclusive commercialization rights outside the U.S. Arrowhead will also be eligible for tiered royalties on net sales of 20-25%.
Shares of Arrowhead (Nasdaq: ARWR) were up 1.5% on the Nasdaq in Thursday afternoon trading, while shares of Takeda (TYO: 4502) were also up 1.5% on the New York Stock Exchange, where they trade in the U.S. market (NYSE: TAK).
“[Antitrypsin-associated] liver disease is a devastating condition for which there are no approved thearpies,” said Asit Parikh, head of Takeda’s gastroenterology therapeutic unit, in a statement. “With its RNAi-based mechanism of action, ARO-AAT has the potential to treat the underlying cause of AATLD.”
According to research, alpha-1 antitrypsin deficiency, the underlying cause of AATLD, is estimated to affect 180,000 people worldwide. The companies note that the underlying deficiency affects 1-in-3,000 to 5,000 people in the U.S. and 1-in-2,500 people in Europe.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
In a note to investors Thursday, RBC Capital Markets analyst Luca Issi wrote that the deal makes strategic sense and validates data for the drug ahead of a liver disease meeting that is happening next month. He wrote that the deal makes sense given that Takeda is already a market leader in AAT-augmentation therapy, with sales infrastructure in place to reach patients and physicians, and because the upfront cash removes any potential overhang related to dilution.
Photo: mediaphotos, Getty Images
