Biogen has acquired an experimental drug for a type of deadly stroke, adding to the belief that the company, under new CEO Michel Vounatsos, will be more aggressive in pursuing deals to stock its pipeline.
Biogen (NASDAQ: BIIB) is buying glyburide (CIRARA) from New York-based Remedy Pharmaceuticals for $120 million in cash plus potential future milestones and royalties, should the drug succeed in clinical testing.
Remedy’s drug is being tested for large hemispheric infarction (LHI), an uncommon but particularly deadly type of “ischemic” stroke—meaning it results from a blockage in a vessel supplying blood to the brain. According to Remedy, LHI accounts for about 110,000 of the roughly 795,000 strokes in the U.S. each year. While 8 to 10 percent of strokes lead to death, some 40 to 80 percent of LHI cases result in death, according to Remedy. Glyburide is supposed to reduce the risk of disability and death by blocking a molecular pathway, SUR1-TRPM4, involved in brain swelling.
Biogen has made it clear already that stroke therapies are an area of focus. Its multiple sclerosis drug, natalizumab (Tysabri), is currently being tested in mid-stage trials of patients with mild to moderate acute ischemic stroke. The Remedy deal complements those efforts with a drug for a different group of stroke patients. Biogen is gambling on a drug that failed a Phase 2 trial in 2015—albeit with a small bet for a company that had $11.4 billion in revenue last year. It’s also splitting the cost of clinical testing with Remedy.
According to a research note from Mizuho Securities analyst Salim Syed, there is “compelling evidence” supporting the drug’s potential benefit on a number of measures, including brain swelling, despite the failed Phase 2 trial. Biogen plans to start a Phase 3 trial next year, and may make some changes to the study that Remedy has been planning, Syed wrote.
The deal continues an “emerging strategy of accelerated business development” from Biogen’s new leadership, headed by CEO Vounatsos, as Barclays analyst Geoff Meacham wrote. On a conference call when he first took over in January, Vounatsos said there would be a “renewed prioritization on business development activities.” That hasn’t led to a large, transformative deal to offset the risky, neuroscience-focused pipeline Biogen has amassed over the years; rather, Biogen continues to double down on risky drugs.
Since the call, Biogen completed the spinoff of its stable and growing hemophilia business, now a separate company called Bioverativ (NASDAQ: BIVV); bought an experimental Alzheimer’s drug from Bristol-Myers Squibb called BMS-986168; and now has added another potential therapy for stroke.