J&J dumps Alios RSV drug, wiping remaining $900M off value

J&J revealed it decided to abandon development after “additional information became available.” (Raysonho/CC0)

Johnson & Johnson has abandoned development of anti-RSV drug AL-8176, wiping another $900 million off the value of the assets it acquired from Alios Biopharma. The writedown comes months after J&J took a $630 million hit tied to the suspension of clinical development of AL-8176.

J&J paid $1.75 billion for Alios in 2014 to boost its pipeline of treatments for viral infections. AL-8176, an oral anti-RSV nucleoside analog, came through a phase 2a months before J&J made its move. The trial linked AL-8176, also known as lumicitabine, to significant reductions in viral load and symptom scores, turning the drug into a hot asset in the potentially lucrative but hard to crack RSV field.

That proved to be a high point for the program. In August, J&J stopped a phase 2b clinical trial of AL-8176. Months later, J&J took a $630 million after-tax impairment charge tied to the setback to the program.

At that stage, J&J still held out some hope that it would find a path forward for the drug but warned that the remaining $900 million intangible asset could be written down later. That has come to pass.

In a regulatory filing, J&J revealed it decided to abandon development after “additional information became available,” triggering a $700 million after-tax impairment charge. The writedown, which will be reflected in J&J’s first quarter results, represents the remaining intangible asset value related to the once-promising AL-8176.

The events put AL-8176 on the sizable and growing list of failed RSV drugs and vaccines. Over the past decade, AstraZeneca has seen its bid to bolster its RSV franchise flounder in the face of a frosty regulatory reception for motavizumab. And attempts by companies including Alnylam, Aviragen and Novartis to get drugs to market have come unstuck at various stages of development.