Biogen is making a huge bet that antisense technology can become a cornerstone treatment for neurological disorders. The big biotech firm is paying Ionis Pharmaceuticals $1 billion in cash to significantly broaden their joint efforts to develop drugs for rare neurodegenerative disorders, as well as diseases like Alzheimer’s and ALS.
Biogen will pay Ionis $375 million up front and buy $625 million worth of Ionis stock. In return, Biogen can license therapies that emerge from the 10-year research pact.
Ionis has long been a leader in the field of antisense therapeutics, which use short, single-stranded RNA to intercept messenger RNA, thereby preventing bad-behaving proteins from being built.
Biogen already has several partnerships with Ionis, including one that yielded a marketed drug, Spinraza, the first treatment for spinal muscular atrophy, a rare and often deadly muscle-wasting disease. The drug is life saving but breathtakingly expensive: $750,000 for the first year of treatment. Approved in the last days of 2016, Spinraza brought in $884 million in sales for Biogen last year.
Already, antisense therapies from its pacts with Ionis make up roughly 20% of Biogen’s early- and development-stage pipeline. That portion is expected to grow under the expanded agreement, which seeks to put several “Spinraza-type” drugs into the clinic. Company executives note that it will take only one drug with the commercial success of Spinraza for the deal to make financial sense.
On a call with analysts, Biogen Chief Scientific Officer Michael Ehlers made the argument that antisense is the best modality to tackle neurological disease, pointedly contrasting its potential with gene therapy, a technology many investors would like to see Biogen bring in-house.
Gene therapy carries much more uncertainty, Ehlers said. “Put simply, we do not believe gene therapy will replace [antisense] but rather provide a complementary modality.”
Biogen executives talked up the long-term merits of the new collaboration, but investors wanted a deal that would bolster the company’s near-term prospects. Biogen signaled that direction last July when it laid out a plan to broaden its neuroscience pipeline that included aggressively pursuing late-stage drug candidates.
Although the pact with Ionis could contribute to the pipeline over the next decade, “we believe it clearly falls short of what most investors are looking for…namely a later-stage acquisition that carries more tangible value,” J.P. Morgan stock analyst Cory Kasimov wrote in a note to investors.