A 'Moderna' Cinderella Story: AstraZeneca's $240M Up Front
By Randy Osborne
Moderna Therapeutics Inc.'s major win, in the form of a $240 million up-front licensing deal with battered AstraZeneca plc for technology still at the preclinical stage, put the spotlight on messenger RNA therapy (mRNA) and sparked guesswork about whether the wager by the pharma giant can bring enough revenue soon enough.
"They wanted a piece of the action, and they wanted a big piece," Stephane Bancel, president and founding CEO of Moderna, told BioWorld Today.
Under the terms, London-based AstraZeneca gets exclusive access to select any target of its choice in cardiometabolic diseases, as well as selected targets in oncology, over a period of up to five years, and Moderna, of Cambridge, Mass., could get as much as $180 million more if three unspecified technical milestones are reached.
AstraZeneca has the option to pick as many as 40 drug products for clinical development, and Moderna stands to gain milestone payments related to clinical and commercial progress, along with royalties on drug sales ranging from high single digits to low double digits for each product.
Trials and commercialization of therapeutics will be AstraZeneca's job, and Moderna will be responsible for designing and manufacturing the mRNA against selected targets.
Beset by trial failures and facing the patent cliff, AstraZeneca needs the kind of help that Moderna may be able to provide relatively quickly. The firm's mRNA drugs, intended to trigger cells to make therapeutic proteins without causing an immune response, "enable [developers] to go after new drug targets that are not druggable today, using either small or large molecules," Bancel said. "This is something very exciting, especially when you think about cardiology, where AstraZeneca is very strong."
The time from target identification to trials is shortened greatly by the approach. "Your body makes proteins like the Amgen plant or the Genzyme plant makes proteins in tanks," Bancel said, and the method is much less expensive than recombinant proteins.
AstraZeneca has other bets. Phase III programs are under way with lesinurad (an inhibitor of the URAT1 transporter in the kidney for gout), olaparib (a PARP inhibitor for BRCA1/BRCA2-mutant ovarian cancer) and selumetinib (a MEK inhibitor for lung cancer), all of which look promising to Leerink Swann analyst Seamus Fernandez, he wrote in a research report.
The company could file for approval of olaparib in Europe this year, based on subset analyses that regulators there may find acceptable. "When asked about fostamatinib (a SYK inhibitor for rheumatoid arthritis), management conviction was less clear to us," Fernandez wrote.
Deal Shows Pharma's Willingness to Risk
Earlier this week, AstraZeneca said it would cut the payroll by 1 ,600 employees and relocate 2,500 jobs, for a one-time restructuring tab of $1 .4 billion, along with a $500 million capital investment in Cambridge, UK. The company aims to save about $190 million per year, though even that will not be sufficient if R&D does not pan out. Revenues dropped last year and will sink more this year, AstraZeneca has said, due largely because patents have expired and continue to do so in territories around the globe for such stars as Seroquel IR (quetiapine fumarate), Atacand (candesartan cilexetil), Nexium (esomeprazole magnesium delayed-release capsules) and Merrem (meropenem). (See BioWorld Today, March 19, 2013.)
In the U.S., patents for proton pump inhibitor Nexium viewed as particularly important for AstraZeneca start expiring in 2014. Generics drugmaker Ranbaxy Inc. has gained tentative FDA approval for its version, and others are formulating theirs. For Seroquel, the depression drug that sold more than $4 billion last year, the challenge comes from Teva Pharmaceutical Industries Ltd.
"It's a complete open door now, in mRNA technology," said Ingmar Hoerr, CEO of Tuebingen, Germany-based CureVac GmbH, reacting to the AstraZeneca deal with Moderna. The speed, efficiency and lower cost of mRNA likely will now come to the attention of other pharma firms, he said.
"In regard to speed, it's the same for us this is not a problem," Hoerr told BioWorld Today, adding that "how you get access to targets is just a strategic topic. There are lots of different possibilities. You can just screen what is off patent, just take it, or you can license [your technology] to existing targets, or do your own screening. We already have more than 2,000 different RNA constructs encoding for 2,000 different proteins expressed in cells."
Hoerr likened the mRNA route as a way to "reinvent the gene therapy approach from the 1990s and make it much safer. Messenger RNA was, for a long time, a forgotten biomolecule. Everybody was jumping on proteins or antibodies. I think it's quite natural that everybody now has begun to explore this new approach."
The AstraZeneca-Moderna deal is likely the largest up-front payment awarded in a preclinical, purely licensing deal on record. Some likened it to the deals in 2010 and 2011 between Abbott and Reata Pharmaceuticals Inc., but that arrangement was structured more like a joint venture. Others compared it to the 2007 agreement between Roche AG and Alnylam Pharmaceuticals Inc., but that one involved an equity stake. (See BioWorld Today, July 10, 2007, Sept. 24, 2010, and Dec. 13, 2011.)
Hoerr said AstraZeneca's move shows "how far they want to take risks right now. It's quite good news. The vision is very strong."
AstraZeneca's stock (NYSE:AZN) closed Thursday at $47.95, up $1.77.
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