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Ionis Gets $25M From GSK for Experimental Hepatitis B Program

Xconomy San Diego — 

Infections caused by the hepatitis B virus, which attacks the liver, are typically treated with drugs that keep the virus from making ever more copies of itself.

However, because those treatments reduce but don’t eliminate the virus, patients have to take the drugs indefinitely, according to the World Health Organization.

Ionis Pharmaceuticals (NASDAQ: IONS) has a pipeline of two drugs that the biotech says target the root cause of liver disease associated with chronic hepatitis B. (The condition is considered chronic if patients test positive for more than six months). The drugs are designed to reduce the production of viral proteins associated with such infections, including hepatitis B surface antigen, which, if discovered in a blood test, is an early sign of infection.

The company, which is based in the North County San Diego city of Carlsbad, said Tuesday that results from clinical trials of its investigational medicines have captured the attention of one of its Big Pharma partners. Ionis is licensing the drugs to British developer GlaxoSmithKline (NASDAQ: GSK)—with which it had been developing the treatments—following Phase 2 testing on both drugs. The company didn’t release any data from the trials, saying in a news release that it would present its results at an upcoming medical congress.

Founded in 1989, Ionis has built a business around inventing new medicines based on antisense technology, which targets RNA, the molecular messengers that carry instructions for proteins. The technology is aiming to stop the genetic material from producing disease-causing proteins. Its first drug using the technology, nusinersen (Spinraza), was approved as a treatment for spinal muscular atrophy in 2016. The treatment, now owned by Biogen (NASDAQ: BIIB), was the first drug approved to treat the condition, a rare neuromuscular disorder.

Other companies have focused on silencing genes before they can make harmful proteins, a method of drug-making called RNA interference, which Xconomy reported in April has recently picked up momentum after years of fits and starts. It has attracted financing for companies such as Cambridge, MA-based Alnylam from big partners, too. Alnylam (NASDAQ: ALNY) and Regeneron Pharmaceuticals (NASDAQ: REGN), of Tarrytown, NY, are together developing treatments for eye and neurological diseases using RNA interference, a co-development deal for which Regeneron agreed to pay $400 million upfront and to buy $400 million in Alnylam stock.

Pasadena, CA-based Arrowhead Pharmaceuticals (NASDAQ: ARWR) released encouraging data about a year ago showing eight patients who received its drug for chronic hepatitis B in clinical trials saw significant reductions in hepatitis B surface antigen, the protein Ionis is also targeting with its drugs. Shortly thereafter, the program was snapped up by Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson (NYSE: JNJ), in a deal worth $250 million upfront, including a $75 million equity investment. The drug also uses RNA interference.

Around the same time last year Foster City, CA-based Gilead (NASDAQ: GILD) teamed up with Precision Biosciences to fund the Durham, NC-based company’s research and development for a drug that could treat the infection using gene editing.

For the Ionis deal, GSK, in exercising its option to license Ionis’s hep B program, agreed to pay a $25 million license fee upfront. Depending on how the drug performs as the UK-based pharma company continues its development, it may make additional payments of up to $237 million. If the drug reaches the market, Ionis would get royalty fees.

Patients living with the virus can face complications including serious liver disease and liver cancer, according to the Hepatitis B Foundation, which estimates that 292 million people worldwide have chronic hepatitis B, including more than two million people in the US.