Arrowhead Pharmaceuticals is capitalizing on the clinical trial success of a drug it licensed to Amgen six years ago, announcing Wednesday a royalty rights deal that will hand it $250 million now and as much as $160 million more over time.
Under the agreement, Arrowhead will sell rights to future royalties on an experimental heart disease drug called olpasiran to Royalty Pharma, a prolific biopharmaceutical dealmaker. Arrowhead’s royalty interest in olpasiran, which Amgen plans to advance into late-stage clinical testing this year, goes up to low double digits on future net sales worldwide.
Arrowhead will still be eligible to receive milestone payments from Amgen on olpasiran’s development, regulatory and sales success, potentially worth up to $400 million.
The deal was announced days after Amgen presented detailed data from a mid-stage study suggesting that olpasiran could offer a new way to lower the risk of heart disease. The drug is designed to prevent production in liver cells of a protein particle called lipoprotein(a), which in recent years has emerged as a risk factor rivaling LDL cholesterol in significance. No drugs are approved to reduce lipoprotein(a) levels and changes in diet and exercise don’t seem to help.
In testing, olpasiran was able to eliminate lipoprotein(a) from the blood, leading Amgen to announce plans to run a large clinical outcome study to prove treatment can prevent heart attacks and strokes in people with cardiovascular disease.
“Cardiovascular disease remains the most common cause of death worldwide despite certain treatment advances, and new therapeutic targets are greatly needed,” Pablo Legorreta, Royalty Pharma’s CEO, said in a statement. “Olpasiran is a promising late-stage treatment approach with the potential to lower lipoprotein(a).”
Novartis is also developing a lipoprotein(a)-targeting drug that’s further ahead than olpasiran, having already been advanced into Phase 3 testing.
For Arrowhead, the cash received through the deal extends the company’s operating runway by three to four quarters, according to a Wednesday client note from RBC Capital Markets analyst Luca Issi.
In the company’s statement, CEO Chris Anzalone said the deal proceeds would be used to fund investment in Arrowhead’s RNA-targeting drug platform and help expand its pipeline of experimental medicines.
Shares in Arrowhead fell by 6% in Wednesday morning trading, however, outpacing declines for a broader biotech stock index.
The deal adds to a recent string of royalty rights and alternative financing agreements in biotech, a list that includes Blueprint Medicines, Theravance Biopharma, Agios Pharmaceuticals, PTC Therapeutics and, most recently, Fibrogen. With biotech stocks largely still in retreat, drug companies have faced a more challenging financing environment, particularly as lower share prices have made secondary stock offerings less lucrative.