Roche Holding AG, already advancing multiple therapies and diagnostics for COVID-19, is adding its support for Boston-based Atea Pharmaceuticals Inc.'s AT-527 to the lineup. For $350 million in cash up front, plus potential milestone and royalties to Atea, the Swiss firm has secured exclusive rights to research, develop and distribute the oral antiviral candidate for the treatment of COVID-19 outside the U.S.

Atea retained U.S. rights to the drug, but will depend on Roche for global manufacturing and could turn to Roche subsidiary Genentech Inc. for support with domestic distribution if it chooses.

The agreement follows multiple trials of Roche's I.V. IL-6 receptor antagonist, Actemra (tocilizumab), that have failed to establish it as a helpful therapy for hospitalized COVID-19 patients, including one in The New England Journal of Medicine on Oct. 21. Another test, combining tocilizumab with the antiviral remdesivir, a product of Gilead Sciences Inc., is underway. Roche has also agreed to help manufacture and test REGN-CoV2, an experimental antibody cocktail being advanced by Regeneron Pharmaceuticals Inc.

But without a novel therapeutic or vaccine program of its own in which to invest its substantial clinical might or reap financial rewards and plaudits, the company has been largely alone amid the world's top 10 publicly traded pharmaceutical players until now. Whether Roche sought to change that state of affairs through its partnership with Atea or was satisfied with its current role in the race to develop new medicines to battle the pandemic was unclear. Both companies declined requests for interviews.

A boon for Atea

The Roche deal arrives just five months after Atea raised a $215 million series D financing to support the program, now in a phase II study for hospitalized patients with moderate COVID-19. The sizable $350 million Roche will now pay to carry that program ahead ranks as the 9th largest up-front payment associated with a biopharma development and commercialization deal so far this year, according to BioWorld data.

Atea’s team next plans to initiate a global, registrational phase III trial in outpatients in the first half of 2021, the company said on Oct. 22. Additionally, the company is planning a phase III trial testing AT-527 in the post-exposure prophylaxis setting.

The collaboration aims to accelerate all aspects of the work, including clinical development and manufacturing, which, due to the technologies involved, could be quickly and at large scale, the companies said.

An oral, purine nucleotide prodrug, AT-527 has demonstrated in vitro and in vivo antiviral activity against several enveloped single-stranded RNA viruses, including human flaviviruses and coronaviruses. Data from a phase Ib/IIa trial of the candidate showed pan-genotypic antiviral activity in cirrhotic and noncirrhotic hepatitis C-infected patients. The data, released in late 2018, showed the drug was safe and well-tolerated with once-daily dosing of 550 mg for seven days.

The company was co-founded and is led by CEO and chairman Jean-Pierre Sommadossi, principal founder of Idenix Pharmaceuticals Inc. and a co-founder of Pharmasset Inc.

Evercore served as exclusive financial advisor to Atea in connection with the Roche transaction.

Seeking success in partnership

Roche has invested substantial efforts in developing therapies to respond to the COVID-19 pandemic, though with mixed success. On the diagnostics front, it has seen clearer success, developing an entire portfolio of high-volume, lab-based and point-of-care tests to support detection of SARS-CoV-2 and respiratory compromise associated with the infection. Most have garnered both FDA emergency use authorizations and CE Marks.

On the therapeutics front, its track record is still developing. It has sponsored three phase III trials of Actemra: Covacta, Empacta and Remdacta. Covacta did not meet its primary endpoint of improved clinical status in patients with COVID-19-associated pneumonia or the key secondary endpoint of reduced mortality. In Empacta, there was no statistical difference in mortality between patients who received Actemra or placebo. Remdacta is still underway, testing Actemra with remdesivir in hospitalized patients with severe COVID-19 pneumonia.

In August, Roche agreed to jointly fund and execute both phase III prevention and phase I healthy volunteers safety studies of Regeneron's REGN-COV2, as well as additional global studies to evaluate further the potential for the antibody cocktail in treating or preventing COVID-19.

Roche will be primarily responsible for securing regulatory approvals outside the U.S., following the initial EMA approval, and conducting any additional studies specifically required for approval by regulators outside the U.S. Furthermore, according to a recent regulatory filing by Roche, "any worldwide gross profits from the antibody product will be aggregated and shared based on a prespecified formula, which is estimated to result in Regeneron receiving approximately 50% - 60% of the worldwide gross profits, depending on the amount of manufactured antibody product delivered by each party."

Speaking to the strategy behind Roche's overall approach, Roche Pharmaceuticals CEO Bill Anderson said that "the ongoing complexities of COVID-19 require multiple lines of defense. By joining forces with Atea, we hope to offer an additional treatment option for hospitalized and non-hospitalized COVID-19 patients, and to ease the burden on hospitals during a global pandemic.”