Johnson & Johnson has paid $175 million upfront for the global rights to Arrowhead’s phase 1/2 RNAi hepatitis B drug. The outlay, plus $1.6 billion in milestones, has bought J&J a drug that slashed levels of hepatitis B virus (HBV) in a small, early-phase assessment.
That data drop, which was presented last month, looks to have persuaded J&J to pull the trigger on a deal that could mushroom in value. For now, J&J is handing over $175 million upfront and making a $75 million equity investment at an above-market price. Beyond that, J&J has lined up milestones worth $1.6 billion, starting with $50 million payment tied to a phase 2 trial.
The figures reflect the potential of Arrowhead’s hepatitis B drug, ARO-HBV. Last month, Arrowhead presented data showing eight patients who received three monthly doses of ARO-HBV experienced 96%-plus decreases in levels of circulating HBV surface antigen. Higher doses are being tested.
While ARO-HBV is still a long way from proving itself, J&J has seen enough to make its move. J&J will take responsibility for clinical development of the drug once Arrowhead has wrapped up the ongoing phase 1/2 trial.
The deal is a big moment in the turnaround of Arrowhead, which shelved its original hepatitis B drug after learning of the deaths of nonhuman primates. Arrowhead’s setback allowed rival RNAi drugs from Alnylam and Arbutus Biopharma to steal a lead. But the company has roared back since getting ARO-HBV into the clinic.
J&J has also signed up to work with Arrowhead on other programs. In return for up to $1.9 billion in option fees and milestones, Arrowhead will work on new candidates against three targets selected by J&J. Funded by its partner, Arrowhead will take the assets up to the IND stage, at which point J&J will have an option to pay for the exclusive license.
Arrowhead's shares were down around 8% in mid-morning trading on thew news.