Novartis AG bolstered its portfolio of multiple sclerosis (MS) treatments on Friday by agreeing to buy an experimental drug from GlaxoSmithKline PLC for up to US$1 billion, the company said.
Novartis, the Swiss pharmaceutical giant, acquired the rights this year to use the drug, ofatumumab, to treat cancer and sells it under the name Arzerra. This was part of a broader swap of assets completed in March, in which Novartis took over Glaxo’s cancer drugs and Glaxo took on much of Novartis’ vaccine business.
The deal announced on Friday gives Novartis all remaining rights to ofatumumab, which is being developed to treat relapsing, remitting multiple sclerosis and other autoimmune conditions.
Having the rights under one ownership would avoid the complications that could arise from having two companies selling the same drug for different uses. The deal also bolsters a portfolio of drugs Novartis is developing for multiple sclerosis, centered around its blockbuster pill Gilenya.
Novartis is to pay US$300 million upfront to Glaxo and another US$200 million once late-stage clinical trials start. Novartis would make payments of up to US$534 million on top of that, depending on whether development targets are reached. The company is also to pay royalties of up to 12 percent to Glaxo on any future net sales of the drug.
“Novartis is pleased to further reinforce our commitment to neuroscience and to add an exciting new treatment to our strong MS portfolio,” Novartis Pharmaceuticals division head David Epstein said in a news release.
In addition to Gilenya, Novartis sells a multiple sclerosis drug called Extavia and recently began marketing a generic version of Teva’s Copaxone, one of the most widely used drugs for the disease. It also has some other drugs in development. Gilenya could lose patent protection starting in 2019. So filling the loss could be another reason for Novartis to want a new drug.
However, the market for multiple sclerosis drugs is crowded, which might limit the sales any new drug like ofatumumab could have.
Moreover, ofatumumab is only now ready to enter late-stage clinical trials, putting it a couple of years behind ocrelizumab, a similar drug being developed by Roche.
Both drugs deplete B cells, which are white blood cells that are part of the immune system. B cells are necessary to fight infections, but if they go awry, they can contribute to autoimmune diseases like multiple sclerosis or to lymphomas. Both drugs bind to the same molecule on the surface of B cells — known as CD20 — as Roche’s big-selling cancer drug Rituxan. Rituxan is not approved for multiple sclerosis, but it is approved to treat rheumatoid arthritis, another autoimmune disease.
Ofatumumab, a type of protein called a monoclonal antibody, was developed initially by Genmab, a Danish biotechnology company, which receives royalties on sales.
David Redfern, the chief strategy officer at Glaxo, said in a news release that the sale would allow the company to focus on core areas, including HIV, oncology and vaccines.
“We are pleased to have completed this transaction to divest the remaining rights in ofatumumab, crystallizing significant additional value for GSK shareholders,” Redfern said.
The deal is expected to be completed by the end of the year.
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