Ra Pharmaceuticals, whose lead autoimmune disease drug candidate is viewed as a potential alternative to one of the most expensive medicines in the world, is being acquired by Belgian pharmaceuticals giant UCB in a $2.1 billion deal.
According to terms announced Thursday, UCB will pay $48 in cash for each Ra Pharma share. That’s a 111 percent premium over Ra’s Wednesday closing stock price. The deal allows Ra Pharma to place its experimental autoimmune disease drug in the hands of a company that has the resources to continue its late-stage development and if approved, sell it worldwide. Shares of Cambridge, MA-based Ra Pharma (NASDAQ: RARX) leaped more than 100 percent following the news, from nearly $23 apiece to about $45 per share.
Ra Pharma develops drugs focusing on the complement system, a group of proteins that work together to help the immune system respond to inflammation and infection. But in some cases the complement system activates inappropriately or uncontrollably, sparking immune and inflammatory disorders. Ra Pharma is developing drugs that blocks pathways that lead to inappropriate activation of the complement system. Its lead disease target is generalized myasthenia gravis (gMG), a chronic autoimmune disorder that disrupts the way nerves communicate with muscles, leading to muscle weakness.
Today’s treatments for gMG include drugs that slow the breakdown of neurotransmitters or suppress the immune system. Two years ago, the Alexion Pharmaceuticals (NASDAQ: ALXN) drug eculizumab (Soliris) won an additional FDA approval for gMG in patients whose disease is positive for a particular antibody. It was the first new FDA-approved gMG treatment in more than 60 years. The antibody drug, which is administered via a bi-weekly infusion, is also approved to treat two rare blood disorders. Priced at more than $500,000 a year, eculizumab accounted for $3.6 billion of Alexion’s $4.1 billion in total sales in 2018.
Ra Pharma’s lead drug, zilucoplan, is being developed as a more patient-friendly alternative to eculizumab. Zilucoplan is a synthetic peptide that’s taken as a once-daily self injection. In results of a 44-patient Phase 2 study, Ra Pharma reported statistically significant score changes according to a muscle weakness test given by physicians. A Phase 3 study is underway; preliminary data are expected in early 2021. Ra Pharma is also developing an extended-release formulation of the drug, as well as a pill version.
UCB says the Ra Pharma drug will complement its own experimental gMG treatment, an antibody drug called rozanolixizumab. Paired with the Ra Pharma peptide drug, UCB would be able to offer two different types of treatments for gMG. Rozanolixizumab is currently in Phase 3 testing. UCB adds that zilucoplan could potentially also address other neuromuscular disorders, including immune-mediated necrotizing myopathy and amyotrophic lateral sclerosis.
The UCB and Ra Pharma boards of directors have approved the acquisition but regulators still need to review the deal. According to the agreement, if another buyer emerges or the deal does not go through for some other reason, Ra Pharma must pay a $75 million termination fee. The companies expect to close the acquisition by the end of the first quarter of 2020. When the transaction closes, UCB says it will keep Ra Pharma’s Cambridge location.