UCB plans to acquire Ra Pharmaceuticals for approximately $2.1 billion, the companies said today, in a deal designed to expand the buyer’s presence in rare disease therapeutics by adding to its pipeline Ra Pharma’s Phase III generalized myasthenia gravis (gMG) candidate zilucoplan—as well as enhance UCB’s drug discovery capabilities by adding Ra’s ExtremeDiversity technology platform.
Zilucoplan is a once-daily self-administered, subcutaneous peptide inhibitor of complement component 5 (C5). Ra Pharma is recruiting patients for the Phase III RAISE trial (NCT04115293), a multicenter, randomized, double-blind, placebo-controlled study designed to confirm the efficacy, safety, and tolerability of zilucoplan in gMG patients. Topline results from the RAISE trial are expected in early 2021.
Zilucoplan is also in development for other indications. One is immune-mediated necrotizing myopathy (IMNM), for which a Phase II trial (NCT04025632) is active but not yet recruiting patients. Another is amyotrophic lateral sclerosis (ALS), for which Ra Pharma had been planning to launch a Phase II/III trial. A third is renal disorders, for which a Phase Ib trial has been completed. Ra Pharma is also developing an extended-release formulation of zilucoplan, as well as a potential first-in-class oral small molecule C5 inhibitor—and has also envisioned developing Zilucoplan for other unspecified “tissue-based complement-mediated disorders with high unmet medical need,” according to its website.
UCB reasons that zilucoplan will complement its own Phase III myasthenia gravis candidate rozanolixizumab, an FcRn targeting antibody that is also being developed for immune thrombocytopenia and chronic inflammatory demyelinating polyneuropathy (CIDP).
Both drugs are potential rivals to Alexion’s blockbuster treatment Soliris® (eculizumab), which has generated net product sales of $1.943 billion in the first half of this year, up 14% from $1.698 billion in January–June 2018. Soliris is indicated for gMG in adults who are anti-acetylcholine receptor (AchR) antibody positive, and has three additional indications: paroxysmal nocturnal hemoglobinuria (PNH), atypical hemolytic uremic syndrome (aHUS), and neuromyelitis optica spectrum disorder (NMOSD) in adult patients who are anti-aquaporin-4 (AQP4) antibody positive.
Beyond myasthenia gravis, the companies said, the acquisition could enable UCB to develop new treatments for several rare diseases in neurology and immunology, as well as different delivery forms, including extended-release and orally available product.
“Ra Pharma is an excellent strategic fit addressing multiple areas of UCB’s patient value growth strategy,” UCB CEO Jean-Christophe Tellier said in a statement. “Upon closing, the acquisition will add to our strong internal growth opportunities—six potential product launches in the next five years, strengthening our neurology and immunology franchises with late- and early-stage pipeline projects.”
Through the acquisition, UCB would also acquire Ra Pharma’s ExtremeDiversity platform, designed to produce synthetic macrocyclic peptides. ExtremeDiversity is based on messenger ribonucleic acid (mRNA) display and combines the diversity, specificity, and high affinity of therapeutic antibodies with the attractive pharmacological properties of small molecules, according to Ra Pharma.
“Accelerate and expand”
UCB said the planned acquisition of Ra Pharma was part of carrying out the “Accelerate and Expand” phase of UCB’s strategic growth path, which began in January. The deal also has the advantage, UCB said, of enabling it to further expand its presence in the United States within the Boston/Cambridge, MA, region—the nation’s leading biopharma clusters according to GEN’s updated A-List of Top 10 U.S. Biopharma Clusters, published September 23.
Under the terms of the companies’ agreement, UCB has agreed to pay Ra Pharma shareholders $48 cash for each Ra share they own at closing of the transaction—an approximately 93% premium to Ra Pharma shareholders based on the 30-day volume weighted average closing stock price of Ra Pharma prior to the companies signing their merger agreement.
UCB said its acquisition of Ra Pharma will be financed by a combination of existing cash resources and new bank term loans, arranged and underwritten by BNP Paribas Fortis and Bank of America Merrill Lynch. The deal will not impact UCB’s 2019 financial guidance, but is expected to add to UCB’s core earnings per share from 2024 onward, as well as enable accelerated top and bottom line growth for UCB from 2024 onward, the companies said.
The deal is set to be completed by the end of the first quarter of 2020.
The Boards of Directors of both companies have unanimously approved the deal, which remains subject to approval by Ra Pharma shareholders, as well as to obtaining antitrust clearance and other customary closing conditions. That clearance is uncertain, since the U.S. Federal Trade Commission has carried out longer-than-expected reviews in recent months of biopharma acquisition deals—most notably Roche’s planned $4.8 billion purchase of Spark Therapeutics.
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