Eyeing NASH, Gilead wagers $1.5B on preclinical fibrosis drugs
- Large drugmakers have been willing to pay big bucks to improve their odds of bringing NASH therapies to market, a trend exemplified again Wednesday as Gilead Sciences put more than $1.5 billion on the table for access to a Massachusetts biotech's preclinical fibrosis programs.
- Upfront, Gilead is handing over $50 million in cash and purchasing $30 million worth of Scholar Rock Holding Corp.'s common stock in exchange for exclusive options to license product candidates that come from three of the biotech's programs. The programs target a cell signaling protein called transforming growth factor beta, or TGFβ, for the treatment of fibrotic diseases.
- Gilead's also offering $1.45 billion in various milestone payments. In a Dec. 19 statement, Chief Scientific Officer John McHutchison listed diabetic kidney disease and NASH — short for non-alcoholic steatohepatitis — as fibrotic conditions the company is committed to addressing. NASH is a fatty liver disease that affects an estimated 30 million people in the U.S., yet has no Food and Drug Administration-approved treatments.
Within the global pipeline of NASH drugs, Gilead holds one of the few late-stage candidates in selonsertib. Phase 3 studies of the drug are expected to read out in January and March, and positive results could put it in a leading position against rival therapies from Allergan, GenFit and Intercept Pharmaceuticals.
Yet optimism around those studies isn't very high, at least not on Wall Street. Investors see probability of success sitting at 20% to 40%, according to a late October note from Mizuho analyst Salim Syed. Mizuho maintained a 33% probability of success, which Syed called low for a Phase 3 asset.
There's also been concern around another Gilead NASH drug, GS-9674, a farnesoid X receptor (FXR) agonist.
A recent Phase 2 readout showed around 30% of patients taking a high dose of the drug experienced at least a 30% reduction in liver fat, after correcting for placebo. Though Gilead was bullish on the data and intends to push GS-9674 into late-stage testing, some analysts argued the drug wasn't as effective as Intercept's Ocaliva or as free of side effects as Novartis' tropifexor — both of which are also FXR agonists.
The combined skepticism may weigh on the outlook for Gilead's investigational NASH triplet, which combines selonsertib, GS-9674 and an acetyl-CoA carboxylase inhibitor dubbed GS-0976.
Gilead therefore has incentives to de-risk its NASH pipeline through diversification. The Scholar Rock deal looks to be a byproduct of that pressure.
"It makes sense that GILD would want the fibrosis/NASH programs because of the potential for both monotherapy and combo therapies," Jefferies analyst Michael Yee wrote in a Dec. 19 note, adding that Scholar Rock's platform is "particularly unique because it inhibits TGFβ1 as opposed to hitting other isoforms, which could lead to off-target unwanted effects."
Gilead now holds exclusive options to license worldwide rights to drugs stemming from three Scholar Rock programs. They include: inhibitors that target activation of latent TGFβ1 with high affinity and specificity, inhibitors that selectively target activation of latent TGFβ1 localized to extracellular matrix, as well as a third TGFβ discovery program.
Per deal terms, Scholar Rock is in charge of antibody discovery and preclinical research through product candidate nomination. Should Gilead decide to exercise its options, it would then be responsible for the programs' preclinical and clinical development and commercialization.
"We are excited to work with Scholar Rock to investigate this novel approach to TGFβ inhibition as an important aspect of our research programs in fibrotic diseases," Gilead's McHutchison said in the Dec. 19 statement.
Notably, Scholar Rock gets to keep exclusive worldwide rights to certain TGFβ inhibitors for oncology and cancer immunotherapy. The company is already working with Janssen Biotech on one program in that space, according to its pipeline.
Shares in Scholar Rock were up 2% to $23 apiece at market's open Wednesday, but continue to climb to $23.62 apiece by late-morning trading.
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