Axovant has spun off its small molecule team into a new company, Arvelle Therapeutics, as it continues its march toward becoming a biotech with a sole focus on gene therapies.
The neurological and neuromuscular disease arm of Roivant Sciences underwent an official rebranding earlier this month, to Axovant Gene Therapies, and currently expects two early stage trials to generate results soon, including in Parkinson’s disease and GM2 gangliosidosis.
The Basel, Switzerland-based Arvelle, meanwhile, will carry forward the European rights to cenobamate, an anti-epileptic drug for partial-onset seizures—as well as over $100 million in initial financing commitments from a global syndicate of investors.
In sum, Axovant will lose about 25% of its staff, including about a dozen in the transition to Arvelle and through the winding down of its other small-molecule development work.
That includes its president and chief commercial officer, Mark Altmeyer, who will become Arvelle’s president and CEO. In addition, Axovant CFO Greg Weinhoff will make the jump at some point later this year, to become Arvelle’s chief financial and business officer.
Axovant will receive a 5% stake in Arvelle, after the completion of its initial capital raise, which is set to include investments from NovaQuest, Life Sciences Partners, BRV Capital Management, Andera Partners and HIG BioHealth Partners. Axovant is not contributing any capital to Arvelle’s launch, however, and will also receive a reimbursement for direct costs associated with the spinoff.
“The transition of Axovant’s small molecule team to Arvelle completes our transformation into a company focused exclusively on the development of innovative gene therapies, while offering us an opportunity to reduce costs and realize long-term value from our legacy small molecule platform,” said Axovant CEO Pavan Cheruvu in a statement.
Cenobamate was licensed from South Korea-based SK Biopharmaceuticals, which successfully filed the drug with the FDA this month and expects an approval decision by late November. Arvelle plans to file a marketing authorization application of its own in the European Union, based on data from SK’s clinical trial program.
“We learned about cenobamate last year as we were defining the company’s new strategic direction, and we formed a unique relationship with SK Biopharmaceuticals through that process,” said Cheruvu, describing Axovant’s involvement with the diligence and structuring of the license deal.
Under the agreement, SK received $100 million upfront, and could receive up to $430 million in regulatory and commercial milestone payments, plus royalties on European sales. SK will also have an option to obtain a significant stake in Arvelle in the future.
"We launched Arvelle to bring truly innovative CNS products to patients suffering from serious neurological conditions and cenobamate is the perfect first pipeline product," said Altmeyer, who previously served as president and CEO of Otsuka America Pharmaceutical, and also led the neuroscience business unit at Bristol-Myers Squibb.
While cenobamate’s mechanism of action is not fully understood, it is believed to work by positively modulating GABA-A receptors while inhibiting persistent sodium currents.
Going forward, Arvelle plans to find additional assets that allow the company to leverage its European footprint, as well as provide opportunities to move into other geographies, Altmeyer told FierceBiotech.