Dive Brief:
- Swiss drugmaker Novartis said Monday it has acquired biotechnology company DTx Pharma and its pipeline of neurological disease drugs.
- Per deal terms, Novartis will pay $500 million upfront and could owe up to $500 million more if certain milestones are met. The acquisition gives the pharmaceutical company access to DTx’s RNA drugmaking technology and three preclinical-stage drug candidates, including one for Charcot-Marie-Tooth disease.
- The purchase of DTx is Novartis’ second biotech buyout in as many months, following a June deal for Chinook Therapeutics and its rare kidney disease drugs.
Dive Insight:
Novartis said it was drawn to DTx for multiple reasons, interested in both the biotech’s lead treatment for Charcot-Marie-Tooth as well as its capabilities with small, interfering RNA — a technology with which the pharma is already familiar.
Small, interfering RNA, or siRNA, drugs work by disrupting the way cells translate DNA into proteins. SiRNA drugs can obstruct this process, preventing or limiting the production of specific proteins involved in disease.
Novartis has bet big on this approach in the past, acquiring The Medicines Company for a cholesterol treatment called Leqvio that won Food and Drug Administration approval in 2021. It has also twice partnered with Alnylam Pharmaceuticals, including a recent research deal looking at liver failure.
However, getting these drugs to the right location in the body is challenging, particularly for diseases outside of the liver. DTx’s technology is meant to overcome these problems by conjugating siRNAs to certain types of fatty acids that could help deliver the drug to the right cells.
The company aims to use the startup’s technology to “explore its potential to deliver drugs to extrahepatic tissues,” Fiona Marshall, head of the Novartis Institutes for BioMedical Research, said in a statement.
Novartis was also specifically interested in DTx’s treatment for a common type of Charcot-Marie-Tooth, an inherited disease that affects the nervous system. No medicines are approved to treat this type of the disease, which is caused by overexpression of a protein known as PMP22.
DTx CEO Artie Suckow said in an email that, while his company had been in touch with multiple pharmaceutical companies, the bar for doing a deal was quite high.
“Novartis stood out in that they had Dr. Robert Baloh — he clearly shared the same passion for curing [Charcot-Marie Tooth type] 1A as myself and the rest of the DTx Pharma team,” Suckow wrote. Baloh is NIBR’s global head of neuroscience.
“I’m very confident that Bob and his team have the expertise, passion and drive to bring DTx-1252 through a robust clinical development program and, if the data support, through to regulatory approval,” he added, using the drug’s code name.
The deal came about just as DTx was finalizing term sheets for raising a Series C financing round from private investors, Suckow said. The company previously raised over $110 million in venture funding.
In addition to the Charcot-Marie-Tooth treatment, Novartis also gains two early-stage programs for other neuroscience indications.
The deal closed Friday, July 14.