BioPharma, Pharma

Biogen Immunology Strategy Comes Into Focus With $1B HI-Bio Acquisition

Biogen’s acquisition of Human Immunology Biosciences brings a drug candidate with potential applications in multiple immune-mediated disorders. The deal comes just prior to the scheduled presentation of clinical data in two of them.

Biogen is making a strong move in immunology with a deal to acquire Human Immunology Biosciences (HI-Bio), a young startup whose lead program offers pipeline-in-a-product potential that could make it competitive with versatile drug assets from Novartis and Vertex Pharmaceuticals.

Per financial terms announced Wednesday, Biogen is paying $1.15 billion up front to acquire privately held HI-Bio. Payment of up to $650 million more is tied to the achievement of milestones.

South San Francisco-based HI-Bio aims to bring a more targeted approach to the treatment of autoimmune disease. Whereas many of the currently available autoimmune disease drugs work by broadly suppressing the immune system, HI-Bio aims to modulate or deplete the immune cells that are the root causes of such disorders. The first immune cell target of HI-Bio is the plasma cell. While plasma cells make antibodies that are key to the immune response, dysfunction of these cells can lead to the production of autoantibodies implicated in autoimmune conditions.

Lead HI-Bio program felzartamab is a monoclonal antibody designed to bind to  CD38, a protein abundant on the surface of plasma cells. Felzartamab, which HI-Bio licensed from MorphoSys, depletes plasma cells. The drug has reached mid-stage clinical development in three immune-mediated indications: IgA nephropathy (IgAN), antibody-mediated transplant rejection, and lupus nephritis. HI-Bio has said it plans to advance felzartamab to Phase 3 testing in all three indications. The HI-Bio pipeline includes izastobart, an antibody that targets the C5aR1 protein on neutrophils. The potential immunology indications remain undisclosed for this asset, which was also in-licensed from MorphoSys.

The HI-Bio acquisition announcement comes just ahead of the scheduled presentation of two felzartamab abstracts at the European Renal Association Congress in Stockholm this weekend. One abstract details complete Phase 2 data from the transplant rejection study in kidney transplant patients and the other has interim data from the Phase 2 study in IgAN.

“We believe this late-stage asset, which has demonstrated impact on key biomarkers and clinical endpoints in three renal diseases with serious unmet needs, is a strategic addition to the Biogen portfolio as we continue to augment our pipeline and build on our expertise in immunology,” Priya Singhal, head of development at Biogen, said in a prepared statement.

Biogen has been trying to diversify beyond the multiple sclerosis drugs that have defined the company for years and continue to make up the lion’s share of its revenue. Though it identified neuroscience as a way to broaden its scope, the strategy has produced mixed results. FDA approval of the amyotrophic lateral sclerosis drug Qalsody was a win, as was the acquisition of Reata Pharmaceuticals, which brought Skyclarys, the first FDA-approved therapy for rare neuromuscular disorder Friedreich’s ataxia. But Biogen struck out with Aduhelm, the Alzheimer’s disease drug that never gained market traction and was discontinued from further development and commercialization earlier this year.

With HI-Bio, Biogen can expand a presence in immunology that was established by its MS drugs. The neuromuscular dysfunction in MS is driven by excessive activity of a type of immune cell called a B cell. Biogen’s pipeline also includes antibody drugs in late-stage clinical development for systemic lupus erythematosus and cutaneous lupus erythematosus. In a note sent to clients Wednesday, William Blair analyst Myles Minter said much of the focus on Biogen lately has been tied to Alzheimer’s drug Leqembi (whose commercialization is led by partner Eisai), and more recently Skyclarys from the Reata acquisition last year. But he added that much of Biogen’s recent message has focused on immunology. The HI-Bio deal answers questions on whether Biogen had enough internal assets to support a broader immunology focus.

“Given the breadth of the HI-Bio pipeline and supportive proof-of-concept clinical data from the lead asset felzartamab, we see this as a good value for Biogen, which adds a potential first-in-class immunology asset to its somewhat sparse mid-stage portfolio,” Minter said. “We look forward to additional updates on the program in the near term but expect investor focus to remain largely on the Leqembi and Skyclarys launches for the remainder of 2024.”

Felzartamab might face its first competitive test in IgAN, an autoimmune disorder affecting the kidneys. Last month, Vertex Pharmaceuticals announced a $4.9 billion deal to acquire Alpine Immune Sciences, whose fusion protein povetacicept is being readied for Phase 3 testing in IgAN and has early clinical data indicating it can also address other immune-mediated disorders. Meanwhile, Novartis has several contenders in the mix. Iptacopan, an internally developed drug that blocks a protein called factor B, is on track for an FDA submission in IgAN after posting positive Phase 3 data last year. Two other Novartis drugs in development for IgAN work in different ways. These product candidates, one a small molecule and the other an antibody, come from Novartis’s acquisition of Chinook Therapeutics last year.

Biogen said it expects to close the HI-Bio acquisition in the third quarter of this year. It added it will retain HI-Bio’s employees, who will become part of a San Francisco Bay Area team focused on expanding the company’s work in immune-mediated diseases.

Photo: Scott Eisen/Bloomberg via Getty Images