Janssen Pharmaceuticals Inc. is enlisting privately held RNA therapy specialist Arcturus Therapeutics Inc. to help it develop and commercialize new nucleic acid-based drugs for hepatitis B virus (HBV) and possibly other infectious and respiratory diseases. Only a broad outline of the deal's financials was disclosed. Nonetheless, excitement about the tie-up indirectly moved the market, lifting shares of Alcobra Ltd. (NASDAQ:ADHD) by 18.9 percent to $1.51 on Thursday, ahead of a proposed merger with Arcturus.

In exchange for a global license to use Arcturus' UNA Oligomer chemistry and LUNAR lipid-mediated delivery platform, Janssen will pay Arcturus an up-front cash payment of undisclosed value, and carry all development and commercialization costs. If successful, Arcturus could also collect sales milestone and royalty payments.

Outside of identifying previously undisclosed information about target indications, it was unclear if the current deal expands upon a strategic collaboration Arcturus and Janssen first announced in June 2015. (See BioWorld Today, Oct. 30, 2015.)

Janssen's interest in HBV appears to be substantial and has led to a number of collaborative deals over time. In July, Bavarian Nordic A/S and Janssen expanded their partnership with an additional worldwide license and collaboration agreement, valued up to $879 million, granting Janssen the exclusive rights to Bavarian Nordic's MVA-BN technology for two additional programs, targeting vaccines against HBV and HIV-1. The companies are now collaborating on four product development programs combining Bavarian Nordic's MVA-BN technology with Janssen's Advac technology platform.

Furthermore, Janssen is thought to be advancing several of its own candidates. According to Cortellis, current programs include JNJ-0440, an HBV capsid assembly modulator for the potential treatment of HBV infection; JNJ-4964, a TLR agonist under development with Chia Tai Tianqing Pharmaceutical Group Co. Ltd.; and JNJ-0535, presumed to be a DNA-based vaccine co-developed with Ichor Medical Systems Inc.

Arcturus' other big collaboration and license agreements are with Ultragenyx Pharmaceutical Inc. and Takeda Pharmaceutical Co. Ltd. The deal with Ultragenyx, announced in October 2015, covers the development of mRNA therapeutics for select rare disease targets. As part of the collaboration, Arcturus will utilize its UNA Oligomer chemistry and LUNAR nanoparticle delivery platform to initially design and optimize mRNA therapeutics for two targets selected by Ultragenyx. Ultragenyx also has the option to add up to eight additional targets during the pair's collaborative research period. (See BioWorld Today, Oct. 30, 2015.)

The Takeda deal, announced in December 2016, covers the development of RNA-based therapeutics for the treatment of nonalcoholic steatohepatitis and other gastrointestinal-related disorders.

Arcturus' all-stock merger with Tel-Aviv, Israel-based Alcobra will result in a combined company that adds cystic fibrosis to the mix of indications in its scope, leaving behind Alcobra's past as a developer of metadoxine extended release for attention deficit hyperactivity disorder, a program in which its second pivotal trial was terminated prematurely in October following imposition of an FDA full clinical hold. It will also transform Arcturus from a private to a public Nasdaq-traded company. (See BioWorld Today, Jan. 18, 2017.)

On a pro forma and fully diluted basis for the combined company, Alcobra shareholders are expected to own about 40 percent and Arcturus shareholders are expected to own about 60 percent of the combined company at closing. The deal values Alcobra at $46.7 million, including about $35 million in cash it is expected to hold at the deal's close.