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.

Virtual Event

Virtual Clinical Trials Online

This virtual event will bring together industry experts to discuss the increasing pace of pharmaceutical innovation, the need to maintain data quality and integrity as new technologies are implemented and understand regulatory challenges to ensure compliance.

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.

Suggested Articles

The VC shop raised the money across two funds that will deploy cash to help biotechs get started and grow into more established players.

Nearly two years after raising $75 million, iTeos Therapeutics is picking up $125 million to push its lead assets through phase 1/2 trials.

Bristol Myers Squibb and bluebird bio filed their BCMA-targeting CAR-T therapy for FDA approval, teeing it up for a potential green light in 2020.