Dive Brief:
- Argenx, a Netherlands-based biotechnology company focused on antibody drugs, on Monday said it has agreed to acquire a protein specialist in a potentially billion-dollar-plus deal.
- Unnatural Products has a platform that pairs machine learning, screening and other techniques to engineer “macrocyclic peptides.” These peptides are larger and more complex than typical small molecules, which allows them to more effectively bind to tricky proteins and address some challenging diseases. Yet, they’re still tiny enough that they can be swallowed. Argenx plans to use the platform to develop oral, durable medicines for serious immune-mediated diseases.
- The acquisition carries a $550 million upfront cash payment. Unnatural Products could receive up to $595 million more if specific milestones are hit. The companies expect their deal to close before the end of the year.
Dive Insight:
Unnatural Products claims macrocyclic peptides hold the potential to unlock targets once thought to be “undruggable.” That premise, along with the California company’s technology platform, proved enticing to both venture capitalists and big-name pharmaceutical firms like Merck & Co. and Novartis.
Argenx was drawn in as well, having already taken a minority stake in Unnatural Products before pursuing a full buyout. In a statement, Argenx CEO Karen Massey said these macrocyclic peptide capabilities are “highly complementary” to her own company’s antibody engineering.
“After working together for more than two years, we also know there is a strong fit in how we work: science first, entrepreneurial and focused on patients,” Massey added. “We want to preserve what has made [Unnatural Products] successful while bringing the strengths of both teams together.”
The Food and Drug Administration has already approved at least a handful of macrocyclic peptide therapies. In 2020, for example, Rhythm Pharmaceuticals’ Imcivree was cleared as a treatment for certain genetic forms of obesity. The following year, Aurinia Pharmaceuticals’ Lupkynis became the first-ever oral medicine for adults with active lupus nephritis.
In 2023, the FDA greenlit a UCB medicine called Zilbrysq for “generalized myasthenia gravis,” a rare autoimmune condition that’s become somewhat of a battleground for several developers. Argenx’s own flagship product, Vyvgart, targets this disease and brought in $4.5 billion in net product sales from January through the end of September.
Thomas Smith, a Leerink Partners analyst who covers Argenx, wrote in a note to clients that the new acquisition “represents potential for longer-term strategic value.” He explained there’s a desire — both in big pharma and in the broader immunology and inflammation research space — to make oral, long-acting therapeutics that are able to be more effective and convenient than conventional biologics.
The Unnatural Products deal, which comes on the heels of Argenx’s potentially $2.2 billion purchase of Forte Biosciences, also “signals further focus on pipeline growth and diversification,” Smith wrote.
Shares of Argenx were up nearly 3% by late Monday morning, to hover around $953 apiece.
