- Belgian drugmaker UCB intends to grow its pipeline of rare disease drugs, announcing Thursday the acquisition of Massachusetts-based Ra Pharmaceuticals for $2.1 billion.
- The all-cash deal would give UCB access to zilucoplan, a synthetic protein that regulates the complement immune system and is under investigation across multiple rare diseases, including generalized myasthenia gravis. Ra expects to have in early 2021 topline data from a Phase 3 study of zilucoplan in gMG.
- UCB has its own experimental gMG drug, rozanolixizumab, which offers the possibility of combination treatments with zilucoplan. If either or both drugs gain approval, they'll have to compete with Alexion Pharmaceuticals' blockbuster product, Soliris. Additional gMG therapies from Alexion, Catalyst Pharmaceuticals and a Netherlands biotech called Argenx are in late-stage testing.
UCB is paying a hefty premium to get its hands on zilucoplan and Ra's technology platform for making synthetic proteins. At $48 per share, the deal represents a 93% premium to the target's 30-day average stock price. Overall, the deal is valued at $2.5 billion because of Ra's cash on hand.
Yet the deal value could be a small price to pay if zilucoplan meets the expectations of sell-side analysts. Stifel forecasts close to $2 billion in peak sales across the U.S. and European Union pending the drug's approval as a gMG treatment, while Eun Yang at Jefferies predicts more than $1 billion in peak sales.
The drug would face immediate challenges, however, namely wrestling away market share from Soliris. By the end of the second quarter, Alexion executives estimated that nearly 1,200 gMG patients in the U.S. were being treated with Soliris. They noted, though, that there was plenty of room for growth, as roughly 8,000 U.S. patients have refractory disease.
Competition could extend beyond Soliris too. Alexion is looking to secure additional gMG approvals for its Soliris follow-on drug, Ultomiris (ravulizumab), as well as a pipeline asset dubbed ALXN1830. Meanwhile, Argenx and Catalyst anticipate late-stage data for their respective drugs coming in over the next few years.
UCB highlighted how zilucoplan could also be useful outside of gMG, in diseases such as immune-mediated necrotizing myopathy and amyotrophic lateral sclerosis, or ALS. Last month, the Healey Center at Massachusetts General Hospital selected the drug along with four others for a first-of-its-kind ALS platform trial.
For UCB, the Ra acquisition fits into the "Accelerate and Expand" phase of its 10-year plan to shape the company into a leader in several disease categories. Thus far, UCB's focus has been immunology and neurology drugs, with executives signaling that there could be six product launches in the next five years.
At the top of the year, UCB forecasted 2019 revenue of 4.6 billion to 4.7 billion euros. The company noted in an Oct. 10 statement that while the Ra deal wouldn't impact that guidance, it would be dilutive to UCB’s mid-term earnings level and push back by a year its long-term EBITDA to revenue goal.