As J&J quietly overhauls R&D, Arrowhead waits for news on RNAi hepatitis B therapy

Johnson & Johnson has yet to publicly detail the R&D overhaul reported last week by Fierce Pharma, and, apparently, at least one company with work that may be deprioritized or reorganized is waiting in the lurch.

“We have seen the media reports about Janssen deprioritizing [hepatitis] broadly and that is consistent with our understanding,” said Arrowhead Pharmaceuticals CEO Christopher Anzalone, Ph.D., on a Monday afternoon earnings call, adding later: “This is all new for us, and so I don’t have too much to comment on this at this point.”

Fierce Pharma reported last week that J&J was shaking up its infectious diseases and vaccine R&D groups at the Janssen pharmaceutical unit. The changes were revealed in documents and a recording of a town hall meeting that Fierce Pharma reviewed. In the meeting, executives detailed to staff sweeping layoffs and new leadership of the combined unit. Some employees who had lost their jobs had not yet been informed as of the time of the town hall.

Among those changes is the deprioritization of J&J's hepatitis B and D programs, according to a slide presentation delivered by Janssen’s James Merson, Ph.D., currently the head of the infectious disease unit. Arrowhead’s JNJ-3989 is not listed on that slide. The companies have been working together since 2018 through a $3.7 billion licensing deal.

J&J has so far not sent a termination letter for the licensing deal, according to Anzalone. He said to his understanding, some legacy hepatitis studies are continuing, but he’s not sure where JNJ-3989 “will ultimately end up.

“We will assess our options and rights when Janssen decides the path forward for the program,” Anzalone said during the first quarter 2023 call.

Listed on the slide presentation were JNJ-8847 and JNJ-9301, neither of which appear on Janssen’s pipeline website. JNJ-3989, however, is listed as in line for a planned regulatory filing.

Should J&J ultimately move away from Arrowhead’s med, Anzalone said the details will need to be worked out, but he did not say whether those conversations are happening. J&J did not return a request for comment as of publication regarding the future of the Arrowhead collaboration.

Anzalone does not believe that J&J can sub-license the med but could perhaps “assign it,” which would require Arrowhead’s approval. It could ultimately end up back with the biotech.

“We don’t know what their goals are here, and we will just have to wait to see,” Anzalone said. “But look, we believe in that program. I think that drug clearly does what it is designed to do.”

RBC Capital Markets analysts predicted that Arrowhead will regain the rights to JNJ-3989 but “is unlikely to invest in the program without a partner given the size of the indication and mixed data so far.”

J&J was working on different strategies and combinations of JNJ-3989 in the hope of finding a “functional cure” for hepatitis B, Anzalone explained. The RNAi therapy is currently in midstage trials for chronic hepatitis B infection. It’s designed to silence all hepatitis B gene products and act earlier in the chain of infection than existing therapies, allowing the body’s immune system to fight and clear all traces of the virus.

The companies presented phase 2 data in August 2020 showing that JNJ-3989 suppressed the virus for 48 weeks after the last dose.

Arrowhead’s James Hamilton, M.D., chief of discovery and translational medicine, said the company is, however, secure in progress on another J&J-partnered med, JNJ-0795, which is in development for nonalcoholic fatty liver disease. Hamilton said that program is in a different division within Janssen, and data is likely forthcoming this quarter.

The company is also “full steam ahead” on a partnership with Takeda for liver disease drug fazirsiran despite mixed results and placebo overperformance in a phase 2 trial readout posted in early January.