Johnson & Johnson, tiny RNA biotech Arcturus combine for hepatitis B work

J&J previously dropped work on hepatitis C in favor of hepatitis B research.

A little over a month after Johnson & Johnson pulled the plug on its hepatitis C pipeline and said it would focus on hepatitis B, the Big Pharma’s biotech unit has notched a deal with Arcturus Therapeutics to help it do exactly that.

Janssen will tap the microcap biotech, which saw its shares jump 37% on the news, to develop and sell nucleic acid-based meds for the treatment of hepatitis B, using Arcturus’ UNA Oligomer chemistry and LUNAR lipid-mediated delivery platform.

The pact, financial details of which were not made public, also includes an option to expand into other infectious and respiratory diseases. But the pair did say that Arcturus gets an undisclosed upfront cash payment, R&D support, as well as biobucks and royalties should any medicine gain approval.

BD&L Summit

Deal-Making Insights for the Life Sciences Industry

Bringing together key deal-makers and serving as an open forum for cross-functional business development and legal teams to share valuable insights and actionable strategies on successfully managing alliances, licensing agreements, and M&A deals.

Janssen says it will take on responsibility for development costs and all commercialization costs associated with the program.

The two are not strangers, as San Diego-based Arcturus is also a graduate from Johnson & Johnson’s JLABS incubator and comes just a few weeks after Arcturus looked to gain a Nasdaq listing through a reverse merger with Alcobra.

Its pipeline built upon a delivery platform and oligomer tech it thinks address two of the challenges of RNA therapeutics: Namely, how to enable systemic delivery to target tissues and maximize stability and potency while minimizing toxicity.

Arbutus Biopharma and Arrowhead Pharmaceuticals are using the oligomer technology on some of their pipeline prospects. And Ultragenyx is working with Arcturus to develop mRNA medicines against rare diseases that make use of both the delivery and oligomer technology. Arcturus also has a relationship with Takeda and has worked with J&J in the past.

The biotech has listed treatments for OTC deficiency and an undisclosed rare liver disease target as the most advanced assets in its in-house pipeline. Boosted by its recent merger, and its J&J pact, Arcturus expects to move at least one drug into the clinic in the next two years.

RELATED: Johnson & Johnson pulls plug on Medivir-Achillion hep C cocktail to focus on hep B

This also marks J&J’s steps into hep B and away from hep C—a franchise saturated with curative meds and with little need for new innovations.

Last month, J&J said it was ditching its hepatitis C cocktail work as it looks for a potential cure to hepatitis B; a disease that affects around 250 million people worldwide, and does need more therapies.

“This new collaboration signifies an expanded relationship between Arcturus and Janssen,” said Joseph Payne, president and CEO of Arcturus.

“Arcturus’ expertise and intellectual property in the field of RNA medicines is complemented by Janssen’s broad capabilities in clinical development, regulatory affairs, and marketing. Together we aim to bring new treatments to patients who are suffering from Hepatitis B and potentially other infectious diseases.”