DUBLIN – Shares in Ra Pharmaceuticals Inc. doubled Thursday as UCB SA made a $48-per-share bid that values the company at about $2.5 billion, or about $2.1 billion net of Ra’s cash.

The deal represents a profitable exit for all of Ra’s current shareholders, although the degree of profitability varies widely. Its stock (NASDAQ:RARX) closed Wednesday at $22.70, immediately before the deal was disclosed. The Cambridge, Mass.-based company, which was founded in 2008, has raised about $512 million in equity financing since its inception. That includes $86 million in venture capital, $105.4 million in an IPO in October 2016, which it priced at $13 per share, and follow-on offerings priced at $6 per share, $15.50 per share and, in July, at $32.50 per share, which raised $50.4 million, $130 million and $149.5 million, respectively. Shares of Ra closed Thursday at $45.64, shooting up 101%.

The deal is a big scientific win for Ra Pharma’s founders, Douglas Treco, its CEO from the get-go, and Jack Szostak, a 2009 Nobel laureate who is professor of genetics at Harvard Medical School. The Swedish Academy recognized Szostak (along with Elizabeth Blackburn and Carol Greider) for work on telomeres, but his contribution to Ra Pharma centered on the development of an mRNA display technology, which enabled the synthesis and screening of massive libraries of macrocyclic peptides.

Whether the transaction will deliver for patients is still an open question. Ra’s most advanced drug candidate, zilucoplan (formerly RA-101495), a macrocyclic peptide inhibitor of complement C5, is undergoing a pivotal phase III trial in generalized myasthenia gravis (MG), a neuromuscular condition caused by auto-antibody attack on acetylcholine receptors (and sometimes other proteins) located at the neuromuscular junction. That attack on acetylcholine receptors triggers activation of the classical complement pathway and assembly of its associated membrane attack complex, leading to localized inflammation, tissue damage and, ultimately, muscular weakness.

The first patient was dosed at the start of this month. In all, the study will randomize 130 patients who have auto-antibodies directed against the acetylcholine receptor to receive either 0.3 mg/kg of zilucoplan, which is self-administered as a once-daily subcutaneous injection, or placebo. The primary endpoint of the study is a change from baseline to week 12 in the Myasthenia Gravis Activities of Daily Living score. It follows a successful 12-week phase II study in which patients who received the drug attained a placebo-corrected improvement from baseline of 2.8 points in the 39-point Quantitative Myasthenia Gravis scale.

The phase III data are expected in early 2021, by which time rival firm Alexion Pharmaceuticals Inc. will have clocked up several years of experience in the same indication. New Haven, Conn.-based Alexion received FDA approval in MG for its venerable C5 inhibitor, Soliris (eculizumab), in October 2017. (Its first approval, in paroxysmal nocturnal hemoglobinuria, dates back to 2007.) A phase III trial of Ultomiris (ravulizumab), the long-acting successor to Soliris, is also underway.

The Ra acquisition gives Brussels-based UCB a second shot on goal in an indication in which it already has a phase III program. It expects to report pivotal phase III data in 2021 from a trial of rozanolixizumab, an antibody inhibitor of the neonatal Fc receptor (FcRn). The receptor underpins an endogenous recycling mechanism that maintains high serum levels of immunoglobulin G (IgG) and albumin by exporting previously internalized proteins before lysosomal degradation can occur. In MG, targeting FcRn is intended to reduce circulating levels of damaging auto-antibodies. Argenx SE, of Breda, the Netherlands, is also in phase III in MG with an FcRn-directed therapeutic, the antibody fragment efgartigimod (ARGX-113).

Alexion has also moved into the space. It paid $400 million up front – with up to $800 million more to come – to acquire Syntimmune Inc. last year, which had been in early clinical development in several indications with SYNT-001. Now called ALXN-1830, the antibody is slated to enter a phase II/III trial in MG early next year. (See BioWorld, Sept. 27, 2018.)

More recently, Alexion in-licensed ABY-039, an affibody or a small-sized antibody mimetic, from Solna, Sweden-based Affibody AB, for $25 million up front plus up to $625 million in milestones.

The stage is set for a competitive stand-off in MG, but the main players could have additional company. Cambridge-based Alnylam Pharmaceutical Inc. is in early clinical development with an siRNA-based C5 inhibitor, cemdisiran. Although its initial indications are immunoglobulin A nephropathy or Berger’s disease, a renal condition arising from a build-up of IgGA antibodies in the kidneys, and atypical hemolytic uremic syndrome, a life-threatening, complement-mediated clotting condition, it too could potentially be moved into MG. Conversely, Ra is also in or is planning phase II trials of zilucoplan in amyotrophic lateral sclerosis and immune-mediated necrotizing myopathy, an autoimmune condition characterized by muscle weakness.

Complementary products

Should it successfully steer both of its MG drugs to the marketplace, UCB envisages different roles for each of them. Zilucoplan will be positioned for those patients whose symptoms are not managed sufficiently by the current standard of care – which includes cholinesterase inhibitors (to prolong the half-life of acetylcholine), corticosteroids, immunosuppressants and intravenous immunoglobulin. “We see zilucoplan really playing that role of controlling the patient, as sort of a baseline treatment, at home, [using] a very convenient way of delivery,” Charl van Zyl, UCB’s executive vice president and head of neurology, told an investor call audience. Rozanolixizumab is being developed initially as an acute therapy for patients in crisis, even though its long-term strategy also involves the development of a subcutaneous formulation for at-home administration. “The patients we will come to market with will be more in the acute, refractory stage,” van Zyl said.

Being in possession of two product franchises focused on the same indication ought not to be a problem, according to Jefferies analyst Peter Welford. “There has recently been increased antitrust scrutiny on a number of M&A transactions involving overlapping therapeutic areas, with Bristol-Myers Squibb having to divest [the psoriasis drug] Otezla as part of the Celgene acquisition, and repeated delays to Roche’s proposed acquisition of Spark,” he wrote in an analyst note. “UCB is confident that despite both zilucoplan and rozanolixizumab being in development for MG, they are complementary products with different mechanisms of action, and antitrust clearances should be received allowing the deal to close [by the end of Q1 2020],” he noted.

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