Pasadena’s Arrowhead Pharmaceuticals Inks License and Collaboration Agreements Worth $3.7 Billion

Published : Friday, October 5, 2018 | 4:47 AM

Pasadena-based Arrowhead Pharmaceuticals Inc. announced Thursday it has entered into a license and collaboration agreement with Janssen Pharmaceuticals, Inc., a Johnson & Johnson subsidiary, with a potential value of over $3.7 billion.

The agreement will lead to Janssen developing and commercializing ARO-HBV, Arrowhead’s potentially curative gene-silencing drug for patients with chronic hepatitis B infection.

Arrowhead also signed a research collaboration and option agreement with Janssen to potentially develop up to three additional RNA interference (RNAi) therapeutics against new targets that Janssen will select, Arrowhead said in a statement Thursday.

Under the agreement, Arrowhead will receive $175 million as an upfront payment. Separately, Johnson & Johnson Innovation, or JJDC, Inc., will invest $75 million in equity in Arrowhead common stock, at $23 per share.

“This agreement represents an important next step for ARO-HBV,” Christopher Anzalone, Arrowhead President and CEO, said. “Arrowhead has established a leadership position in the field over the past several years, and Janssen’s proven development capabilities, global commercial reach, and commitment to HBV make it the ideal partner to potentially accelerate our goal of bringing a functional cure to patients with chronic HBV.”

Anzalone said the collaboration also validates Arrowhead’s Targeted RNAi Molecule (TRiM) platform, and provides the opportunity to create up to three additional novel medicines by leveraging Arrowhead’s expertise in RNAi drug discovery, and Janssen’s clinical development and commercial capabilities.

Arrowhead is eligible to receive up to $1.6 billion in milestone payments for the HBV license agreement, including a $50 million payment linked to a Phase 2 study. It could also receive about $1.9 billion in option and milestone payments for the collaboration agreement and tiered royalties on product sales.

Janssen will receive a worldwide exclusive license to the ARO-HBV program under the agreement. Beyond AROHBV1001, Arrowhead’s ongoing Phase 1/2 study of ARO-HBV, Janssen will be wholly responsible for clinical development and commercialization.

Janssen can also select up to three new targets, against which Arrowhead will develop clinical candidates. These potential new candidates do not include Arrowhead’s current pipeline but will use Arrowhead’s proprietary TRiM platform.

The closing of the transactions is expected during the fourth quarter.

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