[Updated, 10/23/14, 4:41 pm ET] Rhythm Pharmaceuticals hinted that a strategic move was coming when a drug it’s been developing for diabetic gastroparesis cleared a key clinical hurdle earlier this year. That came to fruition today, because Actavis has stepped and offered Rhythm a financial payday if that drug can make it to the finish line.
Actavis (NYSE: ACT), the big Irish drugmaker formerly known as Watson Pharmaceuticals, has nabbed an option to acquire Boston-based Rhythm’s wholly owned subsidiary, Rhythm Health—the unit that houses the company’s gastroparesis drug prospect, relamorelin. Actavis has paid Rhythm $40 million up front, and has the right to buy Rhythm Health and the rights to relamorelin for an unspecified additional sum after a Phase 2b trial. Rhythm expects to begin that study by early 2015. The deal doesn’t include Rhythm Metabolic, the biotech’s other subsidiary, which is developing a drug for obesity.
The two companies are establishing a joint development committee to oversee relamorelin’s progress, though Rhythm is managing the drug’s development until Actavis makes a decision on the option.
Rhythm was formed in 2010 by licensing two peptide drug prospects from Paris-based Ipsen. Relamorelin was one of them; it’s an injectable peptide drug derived from the hunger-simulating hormone ghrelin. The idea is that the drug might help spur gastrointestinal movement (known as GI motility), and stop the stomach from getting clogged up. That, in turn, is supposed to alleviate diabetic gastroparesis, a complication of diabetes in which the stomach doesn’t empty into the intestine quickly enough, leading to abdominal pain, bloating, and vomiting. The last drug specifically approved for the disorder in the past 40 years is the now-generic drug metoclopramide. Rhythm executives have said previously that the drug isn’t commonly used because of safety concerns.
[Updated to add more details from Phase 2b study] Rhythm reported positive, yet somewhat mixed top-line results from a 204-patient, mid-stage trial of relamorelin in May. Though the company didn’t divulge the full details from the study, Rhythm said that the drug hit its main goal—reducing gastric emptying time. The company also hit its goal on a secondary endpoint by significantly reducing patients’ vomiting. It didn’t hit statistical significance on some additional exploratory measures judging the potential change in a variety of side effects associated with diabetic gastroparesis; executives claimed that a strong placebo effect “obscured” the results. Those measures were not established clinical endpoints for the trial, so the drug doesn’t have a failure on its record. But Rhythm will likely have to show in future trials that the drug can hit clinical goals like those it previously missed if it hopes to win the support of the FDA.
Co-founder and president Bart Henderson noted in May that Rhythm would likely need partners “in some form” to continue its clinical push with relamorelin. Since then, the company has filed papers to take itself public. Now it’s cut a deal with Actavis.
“This venture allows Actavis, in partnership with Rhythm, to advance the development of this molecule in a manner that minimizes risk in early stage development, yet ensures our ability to acquire global rights to the product upon initiation of Phase 3 trials,” said Actavis senior VP of global brands research and development, David Nicholson, in a statement.