AbbVie already has blockbuster drugs for ulcerative colitis, but that isn’t stopping the pharmaceutical giant from trying to expand its scope in this disease. To that end, the company is acquiring Landos Biopharma, a clinical-stage biotech whose lead asset brings a different approach to treating this prevalent inflammatory disorder of the gut.
According to deal terms announced Monday deal, AbbVie will pay $20.42 for each share of Blacksburg, Virginia-based Landos, which represents a 155% premium to the biotech’s closing stock price on Friday.
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Landos’s drug, named NX-13, is a small molecule designed to target and activate the NOD-like receptor X1, or NLRX1. This receptor is associated with the modulation of inflammatory proteins involved in ulcerative colitis and Crohn’s disease. As a once-daily oral drug, NX-13 would provide a more convenient dosing alternative to many inflammatory bowel disorder drugs that are administered as injections or infusions, including some products currently marketed by AbbVie.
In a Phase 1b test enrolling patients with active ulcerative colitis, the Landos drug posted results showing it was safe and well tolerated across a range of doses. Furthermore, the results showed signals of clinical improvement. Results were published last November in the Journal of Crohn’s and Colitis. A placebo-controlled Phase 2 proof-of-concept clinical trial is underway testing two doses of the drug. The study has a targeted enrollment of 80 patients who have moderate-to-severe ulcerative colitis. Preliminary data are expected in the fourth quarter of this year.
“With this acquisition, we aim to advance the clinical development of NX-13, a differentiated, first-in-class, oral asset with the potential to make a difference in the lives of people living with ulcerative colitis and Crohn’s disease,” AbbVie’s Roopal Thakkar, senior vice president, chief medical officer, global therapeutics, said in a prepared statement.
AbbVie brings several different approaches to the intestinal inflammation, irritation, and ulcers caused by ulcerative colitis. Humira an antibody drug designed to bind to and block tumor necrosis factor alpha, a protein associated with several inflammatory disorders. Rinvoq, approved for both Crohn’s disease and ulcerative colitis, belongs to a class of drugs that block a different set of inflammatory proteins called Janus kinases. The antibody drug Skyrizi blocks IL-23, a signaling protein associated with inflammation. Skyrizi, whose approved indications include the treatment of Crohn’s disease, is currently under regulatory review for ulcerative colitis.
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The AbbVie pipeline includes ABBV-668, a RIPK1 inhibitor currently in Phase 2 testing in ulcerative colitis. AbbVie also holds an option to a biologic drug that Calibr, a division of Scripps Research, is developing for inflammatory bowel disease. This program is in Phase 1 testing.
Founded in 2017, Landos was one of the first startups in Xontogeny, an accelerator run by Chairman and CEO Chris Garabedian, a biotech industry veteran. While the per share price of AbbVie’s Landos acquisition is a premium to its closing stock price last Friday as well as its $16 per share IPO price in 2021, the biotech’s shares have not traded anywhere near that price for more than two years. Last May, the company completed a 1-for-10 reverse stock split that consolidated shares in order to boost the stock price to maintain compliance with the Nasdaq’s listing requirements. On a split-adjusted basis, the per-share acquisition price is still below Landos’s IPO price.
However, Landos shareholders could receive more. The deal includes a contingent value right that will pay up to $11.14 per share, adding $75 million to the purchase price. That additional payment is tied to the achievement of a clinical development milestone. In a regulatory filing, Landos said the milestone is the start of Phase 3 testing of NX-13 or any other drug candidate addressing the NRLX1 pathway for the treatment of ulcerative colitis. This study must start before March 31, 2029, according to the agreement.
In research note sent to investors on Monday, Leerink Partners analyst Thomas Smith wrote that Landos is a “logical strategic fit” for AbbVie, providing the pharma giant with optionality in its inflammatory bowel disorder pipeline for a relatively modest upfront cash payment. While acknowledging some overlap with AbbVie’s Rinvoq, Skyrizi, and Humira as well as the clinical-stage assets for inflammatory bowel disease, Smith said Leerink believes there is high probability of the acquisition closing and low risk of opposition from the Federal Trade Commission.
Photo: Smith Collection/Gado, via Getty Images
