The Swiss pharmaceutical giant Novartis, which has been shedding research programs as part of a broader restructuring, is now backing away from a prominent liver disease that, in recent years, captured much attention and investment from drugmakers.
The disease, called nonalcoholic steatohepatitis or NASH for short, is caused by a progressive buildup of fat in the liver, and over time leads to the organ scarring and becoming less functional. While estimates vary, some experts believe millions of people in the U.S. are living with NASH.
Given the large patient population and the lack of any approved therapies, many companies have deemed NASH a valuable target for drug development. Novartis was among them, and in 2019, it entered into a collaboration and licensing agreement with Pliant Therapeutics, a San Francisco-based biotechnology company. For $80 million upfront, Novartis secured rights to an experimental NASH drug named PLN-1474, as well as up to three other product candidates generated from the deal.
According to Pliant, the deal was amended in November so that research efforts would wrap up before the end of March. However, the company said it received notice on Feb. 17 that Novartis had decided to terminate their collaboration.
“Novartis informed the Company of its decision, as part of its new strategy focusing on a limited number of therapeutic areas, to divest clinical NASH assets and, as a result, to discontinue the development of PLN-1474,” Pliant said in a form filed Thursday with the Securities and Exchange Commission.
Pliant added that the termination will take effect on April 18, after which it retain all rights and licenses granted under the deal.
For Novartis, the separation from Pliant is another step in a monthslong mission to streamline the business. Last April, the company unveiled plans to reorganize the business to, in large part, put a greater focus on "innovative medicines." The announcement came alongside the departures of three top executives: John Tsai, chief medical officer, Susanne Schaffert, head of oncology, and Robert Weltevreden, head of Novartis’ customer and technology unit.
Since then, Novartis has begun the process of spinning out its generics division Sandoz and laying off a significant chunk of its workforce. Multiple research programs have also been cut. Just this month, Novartis discontinued work on a medicine co-developed by Intellia Therapeutics for sickle cell disease, and confirmed it had stopped development on an experimental therapy for Huntington’s disease.
Overall, the restructuring plan is meant to save at least $1 billion in annual expenses by 2024.
On Novartis’ most recent earnings call, CEO Vas Narasimhan said management of the company’s research and development portfolio is the most integrated it’s been in two decades.
“It all falls under one roof now,” he said, adding that commercial considerations are now taken earlier in the R&D process. The company is “more focused on key [therapeutic areas] and being much more disciplined in saying no to projects that [don’t align with its] strategy.”