Janssen, Arrowhead Launch $3.7-Billion RNAi Partnership
Janssen Pharmaceuticals, one of the pharmaceutical companies of Johnson & Johnson, has formed a license and collaboration deal with Arrowhead Pharmaceuticals, a Pasadena, California-based biotechnology company, to develop and commercialize ARO-HBV, a hepatitis B virus (HBV) candidate, as well as up to three RNA interference (RNAi) therapeutics, for up to $3.7 billion.
Under the agreement, Arrowhead will receive $175 million as an upfront payment. Separately, Johnson & Johnson will make a $75-million equity investment in Arrowhead at a price of $23.00 per share of Arrowhead common stock. Arrowhead is eligible to receive up to approximately $1.6 billion in milestone payments for the HBV license agreement, including a $50-million milestone payment linked to a Phase II study. Arrowhead is also eligible to receive approximately $1.9 billion in option and milestone payments for the collaboration agreement related to up to three additional targets. Arrowhead is further eligible to receive tiered royalties up to mid-teens on product sales.
Under the agreement, Janssen receives a worldwide exclusive license to the ARO-HBV program, Arrowhead’s third-generation subcutaneously administered RNAi therapeutic candidate being developed as a potentially curative therapy for patients with chronic HBV infection. Beyond Arrowhead’s ongoing Phase I/II study of ARO-HBV, Janssen will be wholly responsible for clinical development and commercialization.
Janssen can also select up to three new targets, against which Arrowhead will develop clinical candidates. These potential new candidates will use Arrowhead’s proprietary Targeted RNAi Molecule (TRiM) platform for tissue-specific targeting, and do not include Arrowhead’s current pipeline. Arrowhead will perform discovery, optimization, and preclinical development, entirely funded by Janssen, sufficient to allow the filing of a US investigational new drug application or equivalent, at which time Janssen will have the option to take an exclusive license. If the option is exercised, Janssen will be wholly responsible for clinical development and commercialization.
The closing of the transactions is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and is expected to close during the fourth quarter of 2018.