Biogen bags Karyopharm neurological drug in $217M deal

Biogen has added Karyopharm’s KPT-350 to its pipeline. The big biotech is paying $10 million upfront and committing to up to $207 million more in milestones to buy the IND-ready oral SINE compound and related, earlier-stage assets.

Karyopharm has put together a preclinical data package for KPT-350 to show the drug and related compounds could treat a range of neurological and inflammatory conditions, including amyotrophic lateral sclerosis. 

The biotech’s belief in KPT-350’s potential in those indications is underpinned by evidence the drug crosses the blood-brain barrier more readily than other SINE compounds. It's also supported by research suggesting it causes the binding and blocking of NF-κB, a protein involved in inflammation.

Those characteristics make KPT-350 a natural fit for Biogen’s pipeline, which is heavily skewed toward neurological and autoimmune disorders. But the back-loaded deal for a preclinical asset falls well short of the type of business development activity investors are looking to Biogen to pull off to ensure growth down the line. The wait for that deal goes on.

For Karyopharm, the deal furthers its strategy of offloading assets outside of its core areas of focus. KPT-350 works by inhibiting XPO1, a protein that is central to the mechanism of action of other assets in Karyopharm’s pipeline. But with the most advanced of those other assets targeting cancers, the firm has decided it is best served by offloading drugs aimed at different diseases. 

“This transaction is part of our broader strategy of partnering our non-oncology assets while we focus on our primary objective of executing the development of oral selinexor, our lead oncology candidate, pursuing regulatory approval in the United States and European Union, and transitioning toward a commercial-stage enterprise,” Karyopharm CEO Michael Kauffman, M.D., Ph.D., said in a statement. 

In its financial call this morning, Biogen said that its M&A strategy is characterized as "early assets" as the sweet spot but also mid/late stage larger assets they will look at. Jefferies said in a note to clients this morning that Biogen "emphasized the $37B+ of "capacity" which, in our view, makes clear their ability to do a "material" deal if they needed (which we have written in prior notes could include synergy with Sage or AveXis to really move the needle beyond 2019+, or fix the "tail risk" the Street sees with Spinraza - and the comments do still fit fine with this)."