Novartis has made kidney disorders an area of focus, and it’s now adding a new drug prospect through a deal to acquire Regulus Therapeutics, a biotech with a drug ready for pivotal testing in a rare renal disease that has limited treatment options.
The Swiss pharmaceutical giant on Wednesday said it agreed to pay $800 million up front to buy Regulus. Shareholders of the San Diego-based biotech could get more if its lead asset, a genetic medicine called farabursen, passes regulatory muster.
Farabursen is being developed as a treatment for autosomal dominant polycystic kidney disease (ADPKD). This rare disease leads to the development of cysts in organs, mainly the kidneys. As the disease progresses, the fluid-filled cysts enlarge the kidneys, impairing their function. Symptoms include back and side pain, high blood pressure, blood in the urine, and urinary tract infections. In some patients, ADPKD progresses to end-stage renal disease.
Standard ADPKD treatment is managing symptoms and trying to slow disease progression. The lone therapeutic is tolvaptan, brand name Jynarque, an Otsuka Pharmaceutical drug approved by the FDA in 2018 for slowing cyst growth in ADPKD. But this once-daily pill introduces the risk of severe liver toxicity.
Regulus’s research focuses on microRNAs, non-coding RNAs that play a role in regulating gene expression. The biotech’s drugs are oligonucleotides designed to inhibit microRNAs associated with disease. Farabursen targets miR-17, preferentially blocking this microRNA in the kidneys. This approach is intended to reduce cyst growth and kidney size, delaying progression of the disease.
ADPKD is caused by mutations in the PKD1 or PKD2 genes that reduce the function of their respective protein products. In a placebo-controlled, multiple-ascending dose Phase 1b study, results showed increased levels of these protein products in urine. Results also showed improvements in other measures of kidney health. Furthermore, farabursen was well tolerated by study participants. In January, Regulus said it had reached agreement with the FDA on what it would need to show in a Phase 3 study to seek an accelerated approval of farabursen in ADPKD. In late March, Regulus said it planned to start the pivotal study in the third quarter of this year.
“With limited treatment options currently available for patients suffering from ADPKD, farabursen represents a potential first-in-class medicine with a profile that may provide enhanced efficacy, tolerability and safety versus standard of care,” Shreeram Aradhye, president, development and chief medical officer at Novartis, said in a prepared statement.
In a note sent to investors, Leerink Partners analyst Joseph Schwartz said Novartis is “a logical partner” to take on farabursen, especially given the pharma giant’s growing presence in rare renal diseases. In early April, Novartis drug Vanrafia won accelerated FDA approval as a treatment for immunoglobulin A nephropathy (IgAN). That small molecule came from the $3.2 billion acquisition of Chinook Therapeutics in 2023.
Novartis’s internally discovered and developed Fabhalta, a complement protein inhibitor, won accelerated FDA approval last August as a treatment for IgAN. In March, this twice-daily pill expanded its label, becoming the first FDA-approved treatment for C3 glomerulopathy, an ultra-rare kidney disease that can progress to kidney failure. Novartis is running additional studies that could support further expansion of Fabhalta to other kidney disorders.
Regulus was formed in 2008 as a microRNA joint venture between Alnylam Pharmaceuticals and Isis Pharmaceuticals (now known as Ionis Pharmaceuticals). When Regulus went public in 2012, it priced its shares at $4 each. The financial terms of the Regulus acquisition break down to $7 in cash for each share of the biotech, which amounts to $800 million. That price is a 108% premium to the biotech’s closing stock price on Tuesday. Regulus shareholders could receive another $7 per share from a contingent value right in the deal that’s tied to regulatory approval of farabursen.
Schwartz noted that a Regulus regulatory filing states farabursen must secure regulatory approval by the end of 2034 to trigger the contingent value right, but the document does not specify whether that is accelerated approval or traditional approval. Leerink projects accelerated approval could happen in 2029, leaving plenty time if there are delays or the FDA requests more data. While the Regulus acquisition still needs the approval of antitrust regulators, Schwartz does not see much Federal Trade Commission concern because farabursen does not overlap with the kidney indications that Novartis is addressing or researching for Fabhalta.
The Novartis and Regulus boards of directors have approved the acquisition, which the companies expect to close in the second half of this year.
Public domain image by Flickr user Internet Archive Book Images
