Johnson & Johnson is backing away from its $230 million blood pressure bet, returning the global rights to the near-approval treatment to Idorsia in a deal worth up to 306 million Swiss francs ($343 million).
J&J picked up rights to the dual endothelin receptor antagonist aprocitentan in 2017, paying $230 million upfront and agreeing to a royalty rate that ran from 20% to 35% to take control of the asset in the wake of phase 2 data. Back then, analysts at Jefferies were tipping the molecule to generate peak sales of $2.5 billion by reducing blood pressure in patients with resistant hypertension.
A phase 3 clinical trial met its primary endpoint last year, leading J&J to file for approval on both sides of the Atlantic as 2022 rolled into 2023. But, while the study found aprocitentan reduced blood pressure by more than placebo, it also showed 18% of people on the high dose had mild to moderate fluid retention. Aprocitentan has been absent from J&J’s discussions of how it could meet its aim of growing sales to $60 billion by 2025.
Now, J&J has confirmed doubts about its commitment to the candidate. The Big Pharma is returning the rights to aprocitentan to Idorsia as part of a deal that positions it to recoup some of its outlay on the asset.
All told, J&J could receive 306 million Swiss francs, but several things need to go right for that to happen. J&J will receive 30% of any money Idorsia receives for out-licensing or divesting the asset. And, after the first approval of aprocitentan, the Big Pharma will pocket 10% of the proceeds of a deal for any other Idorsia product. The deal also includes low- to mid-single-digit royalties.
Idorsia warned the approval of aprocitentan may happen later than expected. The FDA currently plans to reach a decision on the application in December, but Idorsia CEO Jean-Paul Clozel told investors “it is likely to require an extension to the review period of up to three months.” The delay will allow the FDA to review materials Idorsia thinks can support a streamlined risk mitigation plan for aprocitentan.
As Idorsia's chief financial officer André Muller sees things, the approval of aprocitentan in the U.S. and Europe will give his company “more strategic flexibility” and potentially allow J&J to recoup its outlay on the asset over time.
Investors took a bleaker view of the development, sending shares in Idorsia down 5.7% to below 4.80 Swiss francs in early trading in Switzerland to continue the stock’s long-term slide.