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Idorsia banks $230M as Johnson & Johnson triggers aprocitentan option

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By Cormac Sheridan
Staff Writer

DUBLIN – In a final flourish to its first year of trading, Idorsia Ltd., the Swiss firm spun out of Actelion Ltd., banked a massive $230 million milestone as Johnson & Johnson Co. pulled the trigger on an option to co-develop its phase II hypertension drug aprocitentan (ACT-132577).

Allschwil-based Idorsia will be responsible for conducting the phase III program and for registration, while J&J, of New Brunswick, N.J., will have global sales and marketing rights. It will also be responsible for conducting trials in additional indications. Idorsia will receive tiered royalties on product sales, ranging from 20 percent on annual sales up to $500 million, 30 percent on additional sales up to $2 billion and 35 percent on sales above that threshold.

On the basis of regulatory discussions, a single pivotal trial may be enough to secure approval, Idorsia's head of investor relations and communications Andrew Weiss told BioWorld. "We're not there yet," he said. "But that, right now, is the current understanding, and we're moving forward on that basis."

The phase III study could begin as early as the first half of 2018. It will measure the initial and long-term effects of aprocitentan on systolic and diastolic blood pressure in patients with resistant hypertension – that is, patients with uncontrolled hypertension despite treatment with at least three prior therapies.

If it goes all the way, the drug could gain blockbuster status. "Based on conservative [projections] of the potentially vast resistant hypertension market opportunity, we estimate $2.4 billion U.S. and EU peak sales," Jefferies analyst Peter Welford wrote in an investor note.

The option was one of the add-on components to J&J's $30 billion acquisition of Actelion, also of Allschwil, which the companies cemented in January. The compound, a dual endothelin receptor antagonist (ERA), was not included in the original transaction as it was still undergoing a phase II trial when the deal was being finalized. A positive read-out several months later spurred the present move. (See BioWorld Today, May 23, 2017.)

Aprocitentan is an active metabolite of Opsumit (macitentan), a dual ERA that received FDA approval for treating pulmonary arterial hypertension in October 2013 and which is on track to reach blockbuster status this year. Idorsia has yet to publish the full details of how it differs from Opsumit, but it has a differing pharmacokinetic profile. Although it binds the endothelin receptors A and B with less affinity than its parent molecule, it has a longer half-life and makes a significant contribution to the overall effect of Opsumit.

Idorsia is engaged in business development activity, Weiss said, but its main focus is on the sell side rather than the buy side – it aims "to find attractive partners who have know-how and muscle to help us develop our pipeline," he said. It is open to in-licensing deals on a more opportunistic basis, if the science or the fit makes sense.

Its pipeline includes four other phase II programs, one of which, clazosentan, is also undergoing registration studies in Japan, for treating vasospasm for subarachnoid hemorrhage. ACT-541468, a dual orexin receptor antagonist, is in development for insomnia. Cenerimod, a sphingosine-1-phosphate (S1P1) receptor modulator is in development for lupus. The company also holds an option on vamorolone, a non-steroidal hormonal modulator, which Rockville, Md.-based Reveragen Biopharma Inc. is developing as a replacement for glucocorticoid therapy in Duchenne muscular dystrophy.

"As we move into 2018, several of these programs will be shifting up a gear into phase III," Weiss said.

Idorsia will recognize $160 million of the total from the present deal in the current quarter as contract revenue and will recognize the remaining $70 million over the next three and a half years. That will enable it to break even, more or less, during its maiden year, a feat that is practically unheard of in the biotech industry. Then again, Idorsia is not your average biotech firm. The company exited the third quarter with CHF952 (US$965 million) on its balance sheet.

Shares in Idorsia (ZURICH:IDIA) closed Monday at CHF21.55 unchanged from Friday's close, having edged up to CHF22.65 during early trading. The deal was already priced into the stock – the company is now valued at about CHF2.6 billion.