AbbVie exits $850M Nrf2 deal with Reata, recouping $330M

exit
“AbbVie has been an excellent partner, and our collaboration was instrumental in the clinical development of bardoxolone and omaveloxolone,” said Reata CEO Warren Huff. (Christian Guiton/iStock)

After a nine-year run, AbbVie is calling it quits on its Reata Pharmaceuticals partnership. The Big Pharma, which ponied up more than $800 million for the rights to a set of Nrf2 activators for kidney disease and autoimmune disease, is now handing those rights back for $330 million in cash. 

To regain the rights to its lead program, bardoxolone methyl, Reata will make a $75 million payment to AbbVie by the end of the year and settle the rest in installments in 2020 and 2021. AbbVie will not pick up any royalties from bardoxolone sales, but it will receive royalties from the worldwide sales of omavexolone and “certain next-generation Nrf2 activators,” according to a statement. 

The duo first teamed up in September 2010, when AbbVie was still part of Abbott. It forked over $450 million for the rights to develop and market Reata’s bardoxolone outside the U.S. At the time, the drug, an antioxidant inflammation modulator (AIM), was in phase 2 for chronic kidney disease (CKD). 

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Abbott followed up the next year with another $400 million deal, this time a global collab to jointly develop and commercialize Reata’s AIMs. The duo was to split costs and profits equally for each new indication, except for rheumatoid arthritis and “select other autoimmune diseases,” where Abbott would take on 70% of the costs and profits with Reata picking up the remainder. 

Reata’s pipeline targets the transcription factor Nrf2, which plays a role in restoring mitochondrial function, cutting oxidative stress and blocking pro-inflammatory signaling. The company hit a snag in 2012 when it had to pull the plug on its lead program, bardoxolone, after a data-monitoring committee found that CKD patients in the treatment arm of its phase 3 study were experiencing a higher rate of heart-related side effects. 

The Irving, Texas-based company took a step back, cutting its staff in half and going back to the drawing board. In 2014 pushed bardoxolone into phase 2 development in a new indication, pulmonary arterial hypertension (PAH) and started testing another drug, RTA 480, or omavexolone in lung cancer, melanomia and Friedreich’s ataxia. Since then, it has also tested bardoxolone in two types of inherited kidney disease: CKD caused by Alport syndrome and autosomal dominant polycystic kidney disease, a genetic disorder in which numerous cysts grow in the kidneys.

“AbbVie has been an excellent partner, and our collaboration was instrumental in the clinical development of bardoxolone and omaveloxolone,” said Reata CEO Warren Huff, in the statement.

“The deal is important to us because we get the rights to commercialize CKD indications on a worldwide basis. Now we have all the rights, except those in Southeast Asia, which are owned by our partner Kyowa Kirin. They are really active in the renal space and have been an active partner in our development programs,” Huff told FierceBiotech. “It allows us, as we get the first pivotal readouts, to transition not only to a commercial enterprise but to a global commercial enterprise. Just as important, this also allows us to be in control of getting the drug to patients.”

As for omaveloxolone, Reata is getting the rights back to other neurological indications. “Outside Friedreich’s ataxia, we have compelling preclinical data in Huntington disease, Parkinson’s disease, Alzheimer’s disease and epilepsy. If out MOXIE registrational study in FA is positive, we will dramatically expand our clinical programs across the neuro space,” Huff said.

Reata will be able to recoup the $75 million it pays AbbVie this year through a change to its loan agreement with Oxford Finance and Silicon Valley Bank. The biotech expects to report data from registrational trials of bardoxolone in patients with Alport syndrome and of omaveloxolone in patients with Friedreich's ataxia. Positive topline data from either study will see Reata pocket the sum. 

When asked about the loss of AbbVie as a partner, Huff said ending the partnership probably made the most sense.

“We did this deal many years ago and at the time we did it, [Abbott] was very actively involved in the kidney space, they had several products in the renal-cardiovascular space and were very helpful to us in the early days of development. After their spinout and other events, my impression is they redirected their development strategy to concentrate in autoimmune disease and oncology and really exited the renal-cardiovascular space,” he said.

“And so, the partnership had not been very active in recent years but had these remnant commercialization rights to our products. It’s actually to their credit that they understood the products needed to get to the patients and we’re happy that they engaged with us and we got this question settled.”

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