Reata Pharmaceuticals Inc. has agreed to pay former partner Abbvie Inc. $330 million plus royalties to reacquire ex-U.S. development, manufacturing and commercialization rights for the Nrf2 activators bardoxolone methyl and omaveloxolone, as well as other next-generation candidates in the class. Rights to certain Asian markets for bardoxolone remain licensed to Kyowa Kirin Co. Ltd.
The announcement, on the eve of a closely watched pivotal readout for bardoxolone in Alport syndrome, represents “an immense value-creating opportunity” for the company, Reata’s chief financial officer, Manmeet Soni, told BioWorld. Shares of Reata (NASDAQ:RETA) rose 13% on Thursday to $85.98.
Though Abbvie did have a right to opt in to commercializing bardoxolone tied to an upcoming readout of the phase III Cardinal trial, the possibilities of Reata finding a substitute partner for the program or Abbvie returning its rights had been openly discussed since last year. Abbvie has said little about the program in its corporate filings since the 2012 discontinuation of a phase III study of bardoxolone methyl in patients with stage IV chronic kidney disease and type 2 diabetes due to safety concerns associated with excess serious adverse events.
In moving ahead with reacquisition of the program rights, Reata is financing an initial $75 million of the sum it owes Abbvie with a term loan from Oxford Finance LLC and Silicon Valley Bank, which becomes available upon positive, top-line, registrational data from either the Cardinal study of bardoxolone in patients with Alport syndrome or the Moxie study of omaveloxolone in patients with Friedreich’s ataxia. Overall, the term loan facility increased by $30 million to $155 million.
The remainder of the $330 million is payable in installments in the second quarter of 2020 and the fourth quarter of 2021. In addition, Irving, Texas-based Reata agreed to pay Abbvie low single-digit, tiered royalties from worldwide sales of omaveloxolone and certain next-generation Nrf2 activators, and no royalties on bardoxolone.
The companies first agreed to work together in September 2010, at which point Abbvie (then Abbott Pharmaceuticals) pledged to pay Reata $450 million in up-front and near-term cash payments, at the time, one of the largest up-front fees in biotech history. By the end of 2018, Abbvie’s payments to Reata totaled $300 million. (See BioWorld, Sept. 24, 2010.)
“We had always said we’d seek to acquire these rights back from Abbvie so these drugs could be made available in the Abbvie territories,” Soni said. “This decision reflects our desire to make them available there without any delay, assuming positive results,” he said.
Of the company’s four pivotal studies underway, attention is primarily on the phase III element of Cardinal, a study which enrolled 157 patients with progressive Alport syndrome, a genetic disease involving a progressive loss of kidney function, hearing loss and eye abnormalities. The primary endpoint is to assess the change from baseline in estimated glomerular filtration rate (eGFR) in bardoxolone methyl-treated patients relative to placebo after 48 weeks of treatment.
Last year, the company reported long-term results from the phase II portion of the study demonstrating that patients treated daily with bardoxolone experienced an improvement in retained estimated glomerular filtration rate of about 4 ml per minute in patients who were actively declining by an average of more than 4 ml/min annually prior to the study. (See BioWorld, July 24, 2018.)
This year, the company is hoping to deliver the data the FDA wants to see to support an accelerated approval and, after that, a full approval, which may be supported by showing an improvement in retained eGFR vs. placebo after two years of bardoxolone treatment.
“We’re in active preparation for NDA submission and commercial launch in the event that the Cardinal data are positive,” Reata’s president and CEO, Warren Huff, said during the company’s most recent earnings call, Aug. 8.
Following Alport syndrome, Huff said his team sees autosomal dominant polycystic kidney disease (ADPKD) as the next significant label expansion opportunity for bardoxolone, followed by diabetic chronic kidney disease, an indication under study by Kyowa Kirin. Were it to succeed in ADPKD, it would likely face competition from Otsuka Pharmaceutical Co. Ltd.’s tolvaptan, which gained approval last year. (See BioWorld, April 26, 2018.)
Meanwhile, Reata is also advancing the pivotal part 2 of its Moxie study in patients with Friedreich’s ataxia, which had enrolled 103 patients at last report. Should it succeed there, the drug could potentially move on to evaluation in other neurological indications, such as Alzheimer’s disease. Top-line efficacy and safety data from the trial are expected to be announced before year-end. A fourth pivotal study, the Catalyst trial of bardoxolone in patients with connective tissue disease-associated pulmonary arterial hypertension, is underway.
As of June 30, the company had $280.4 million in cash and cash equivalents, which it expected to fund its operations through data readouts for Cardinal, Moxie and Catalyst.