J&J bails on RSV drug, taking $900M impairment charge
- Johnson & Johnson will largely write off what remained in value from its 2014 purchase of Alios BioPharma for $1.75 billion, ending development of the related lead drug which held a carrying value of $900 million, the big pharma said Thursday.
- The disclosure marks the end of the road for AL-8176, also known as lumicitabine, an experimental drug for respiratory syncytial virus (RSV) and human metapneumovirus. Company executives decided to abandon its development, vaguely citing "additional information" in a filing with the Securities and Exchange Commission.
- Last year, J&J ended mid-stage clinical testing on the compound after taking a $630 million after-tax charge. This time, the $900 million charge translates to about $700 million on a non-cash after tax basis with a $200 million discrepancy resulting from the after tax calculation, a J&J spokesperson stated in a Friday email to BioPharma Dive.
RSV has proven to be a particularly difficult virus to treat. J&J isn't alone in failing in the space, as Regeneron fell short in Phase 3 testing in 2017, which led the Tarrytown, New York-based biotech to discontinue their experimental drug as well.
And just last month, Novavax failed to reach the primary endpoint for a vaccine. While the company's R&D head told BioPharma Dive "the vaccine is not dead," shares in the small biotech plummeted 70% following that clinical readout.
AstraZeneca's Synagis (palivizumab) gained U.S. approval more than two decades ago, and remains the only approved medicine for preventing serious lower respiratory tract disease caused by RSV.
The exit of AL-8176 and the failure of Novavax's therapy in the past couple months have helped further open up the market for MEDI8897, an experimental RSV drug being developed by AstraZeneca's MedImmune unit and Sanofi Pasteur.
Last month, the Food and Drug Administration designated the compound as a breakthrough therapy, which can help speed up the regulatory process. The agency decision was based on Phase 2b trial results. In that study, the therapy met its primary goal of lowering the incidence of medically-attended lower respiratory tract infections caused in certain RSV cases after dosing in healthy preterm infants.
AstraZeneca's increased focus on MEDI8897 corresponds with its decision last November to sell off U.S. rights on Synagis for $1.5 billion upfront to Sobi, a Swedish pharma.
J&J's Janssen doesn't appear completely done with RSV, however, as a federal clinical trial database shows several ongoing or recently completed Phase 2 tests involving another investigational RSV vaccine.
The Danish biotech Bavarian Nordic is also moving forward with its own RSV vaccine, currently in talks with the FDA over Phase 3 trial designs. That late-stage study is expected to start in late 2020, with initial results expected in June 2021, according to a note from Cowen & Co. analyst Boris Peaker.
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