Argenx, a Dutch firm with a pipeline of investigational antibody-based therapies, will pay San Diego-based Halozyme to use its drug delivery technology to develop subcutaneous versions of some of the drugs Argenx is developing to treat rare autoimmune diseases and cancers.
The technology Halozyme (NASDAQ: HALO) is licensing, called Enhanze, allows drugs that would otherwise be delivered intravenously to be injected, which can turn an hours-long process into one that lasts just minutes.
Argenx (NASDAQ: ARGX) agreed to pay Halozyme $30 million up front for exclusive use of the technology for drugs that target the FcRn receptor. One such drug is Argenx’s lead candidate, efgartigimod (ARGX-113), which it is testing as a treatment for multiple diseases, including myasthenia gravis, a chronic autoimmune disorder that causes muscle weakness that often hampers eye and eyelid movement, facial expression, and swallowing.
It also agreed to pay an additional $10 million apiece for up to two additional targets; and up to $160 million in milestone payments for each target with which it chooses to move forward. Halozyme will also get “mid-single digit royalties” on products that make it to the market.
“We believe that by offering both intravenous and subcutaneous formulations, we have the opportunity to capture patient preferences across all indications within our efgartigimod portfolio,” Argenx Chief Operating Officer Keith Woods said, in prepared remarks. In addition to its Netherlands headquarters, Argenx, headed by co-founder Tim Van Hauwermeiren, has offices in Belgium and in Boston, MA.
The Argenx collaboration is the fifth Enhanze deal Halozyme has inked in the past two years, and the company is the ninth biopharmaceutical with which it has a partnership. Its stock rose 3 percent on the news, from $16.12 a share at market close Friday to $16.62 apiece Monday. Tuesday marked another good trading day for Halyzome, with shares closing at $16.95 each.
The recent licensing deals have brought in a total of $230 million in upfront payments, according to the company.
Halozyme has said that it expects to pull in a total of $1 billion in royalty payments by 2027, although Jeffries & Co. analyst Eun Yang, in a November research note, called that estimate “overly optimistic,” especially in its assumption that all of the original brand drugs would be converted to the Enhanze versions. That’s been the case with fewer than 50 percent of the three Enhanze products that have been marketed to date, according to Yang. The total amount Haloyzme received in royalty payments last year was $85 million, the company said. That’s more than the company shells out annually for operating expenses for Enhanze, according to a presentation that Haloyzme CEO Helen Torley gave at the JP Morgan Healthcare Conference in San Francisco in January.
This year, the company anticipates hitting a number of milestones in partnerships it has previously struck. In addition to Argenx, Swiss pharma giant Roche, Pfizer (NYSE: PFE), Janssen (NYSE: JNJ]]), Baxalta (a subsidiary of Shire, recently acquired by Takeda (NYSE: TAK), AbbVie (NYSE: ABBV), Eli Lilly (NYSE: LLY), Bristol-Myers Squibb (NYSE: BMY), and Boston-based Alexion (NASDAQ: NLXN) are also using Enhanze to develop drugs that can be delivered subcutaneously.
Roche subsidiary Genentech has said it anticipates a response from the FDA in March on its injectable version of the cancer drug trastuzumab (Herceptin), which is already being sold outside of the U.S. Also this year, Janssen anticipates completing its Phase 3 trial of its subcutaneous version of daratumumab (Darzalex), which is used to treat multiple myeloma.
Torley is leading the company through a pivotal time. Separately from its Enhanze business, Halozyme is also trying to become a cancer drug maker. In November, it is slated to reveal top-line data from global Phase 3 trials of its investigational drug pegvorhyaluronidase alfa (PEGPH20), which it is testing in combination with chemotherapy drugs as a treatment for advanced pancreatic cancer.
The drug candidate is based on the company’s patented recombinant human hyaluronidase enzyme (rHuPH20) which underpins its Enhanze technology, too: The enzyme breaks down hyaluronan, a gel-like fluid that’s present under the skin, which can smooth the way for drug dispersion and absorption.