Johnson & Johnson takes $630M hit on RSV drug bought with Alios

J&J
At the moment, there are no approved therapies for RSV except for AstraZeneca’s Synagis (palivizumab), a monoclonal antibody for at-risk babies, and no vaccine. (Raysonho/CC0)

Four years ago, Johnson & Johnson splashed out $1.75 billion to take control of antiviral specialist Alios, but the lead drug from that deal now seems to be in trouble.

J&J revealed in August that phase 2b trials of respiratory syncytial virus (RSV) drug lumicitabine—also known as AL-8176—had been placed on hold, and it now says in an SEC filing that it has taken a $630 million impairment charge in the third quarter as a result.

In the filing, J&J said it had to “reassess the carrying value of the AL-8176 in-process research and development asset”, adding that it will “monitor the remaining $900 million intangible asset for further impairment.” The news leaves the fate of the orally active antiviral, which is also being tested in human metapneumovirus (hMPV) infections, hanging by a thread.

The drug was Alios’ lead drug candidate when J&J bought the company in 2014 and one of the main drivers of the deal, as RSV represents a big market opportunity as the leading cause of acute lower respiratory tract infection in children aged under five. The virus generally causes mild cold-like symptoms, but for small children and immunosuppressed patients it can be deadly.

The deal also brought in a couple of hepatitis C virus drugs, including an NS5B polymerase inhibitor that was dropped last year because rival therapies meant the commercial opportunity had diminished dramatically.

Lumicitabine was one of 11 pipeline programs J&J was pitching last year as having the potential to become blockbuster products by 2021. It’s one of just two candidates in infectious diseases, a category in which J&J hasn’t been a major player, sitting alongside pimodivir (JNJ-3872), a drug for influenza A acquired from Vertex.

Ahead of the buyout, Alios said lumicitabine had the potential to go on to become a front-line therapy for RSV, which kills about 200,000 children each year.

At the moment, there are no approved therapies for RSV except for AstraZeneca’s Synagis (palivizumab), a monoclonal antibody for at-risk babies, and no vaccine. Lumicitabine had been considered one of the front runners among clinical candidates for RSV, which has proved to be a tricky target for drug developers.

Novavax was hit hard in the fall of 2016 when it announced a late-stage test of its RSV F-protein recombinant nanoparticle vaccine missed all of its marks across a 12,000-strong study, although it remains in development with a read-out in a maternal immunization trial due early next year. Meanwhile, in 2017 Regeneron ended development of suptavumab (formerly REGN222) as a preventive drug for use in preterm infants.

Also in the pipeline, Sanofi’s recently acquired Ablynx unit is expecting phase 2b clinical trial results for RSV therapy ALX-0171 before the end of the year, and the French drugmaker also has a stake in MEDI8897, another preventive drug developed by AZ’s Medimmune subsidiary that is in midstage testing.