Novartis buys siRNA firm DTx Pharma for $500 million

The Swiss drug giant Novartis has acquired DTx Pharma, a San Diego-based biotech firm, for $500 million plus another $500 million in further possible milestone payments.

DTx specializes in neurological disease treatments and brings three preclinical candidates to the deal. One of them, DTx-1252, is being investigated for treating the progressive disease Charcot-Marie-Tooth. The US Food and Drug Administration granted Orphan Drug Designation to DTx-1252 in May.

DTx’s candidates are based on small, noncoding lengths of RNA, known as small interfering RNA (siRNA). Such strands can treat disease by obstructing and interfering with the production of problematic proteins in cells. But the delivery of RNA to tissues beyond the liver can be challenging.

Biotech firms in the RNA space have taken various tacks to try and get around this. Switch Therapeutics, for example, adds extra cell-targeting RNA strands to its molecules. Entrada Therapeutics bundles its RNA drugs inside protective vesicles.

DTx’s solution is its fatty acid ligand conjugated oligonucleotide, or FALCON, platform. Stitching fatty acids onto the siRNA strands helps drug biodistribution and delivery by taking advantage of fatty acid uptake mechanisms around the body, the firm says.

In addition to further developing DTx-1252, Novartis plans to explore applying the FALCON technology to deliver other drugs beyond the liver, Fiona Marshall, president of the Novartis Institutes for BioMedical Research, says in a statement.

The acquisition is the latest of several oligonucleotide-based deals for large drug firms. Notably, late last year, GSK agreed to pay Wave Life Sciences $170 million plus future milestones as part of a deal to advance up to 11 potential oligonucleotide therapies.

But Novartis isn’t planning to go on too much of an acquisition spree, according to Chief Financial Officer Harry Kirsch. On a call with analysts to discuss the company’s second-quarter results, Kirsch said the firm has earmarked $15 billion of the cash raised by spinning off Sandoz, its generic drug business, for share buybacks, not further deals.