Novartis dances into JPM with $250M Calypso buyout, $185M RNAi alliance

Novartis danced into a big week in the biopharma calendar with a trio of deals. The Swiss drugmaker is paying $250 million to renew its interest in a cytokine, dropping $185 million on two RNAi cardiovascular disease candidates and handing over $37.5 million to partner with an AI-enabled biotech.

Calypso Biotech, a spin-out from Merck KGaA, snagged the biggest of the three upfront fees. Novartis is paying $250 million upfront to buy the Dutch developer of CALY-002, an anti-IL-15 monoclonal antibody. CALY-002 is designed to neutralize the cytokine IL-15 and thereby stop immune activity implicated in a wide range of autoimmune diseases. 

Phase 1b trials are already underway in celiac disease and eosinophilic esophagitis. Novartis plans to go after a “wide variety of autoimmune indications with high unmet medical need,” reflecting evidence that the cytokine controls barrier function and immune cascades in multiple diseases.

That evidence has attracted a clutch of other companies. Amgen and Sanofi, which acquired its stake via the Provention Bio buyout, are partnered on an IL-15 asset that is in a phase 2b trial as a treatment for celiac disease. Equillium is running a phase 2 trial in alopecia areata. Calypso, which began a phase 1 trial in 2020, believes CALY-002 is a best-in-class molecule.

Until recently, Novartis’ pipeline featured a drug candidate that came at IL-15 from the opposite angle. In 2015, the Big Pharma acquired Admune Therapeutics for an IL-15 agonist. That candidate advanced into the clinic as a treatment for solid tumors, only for Novartis to stop (PDF) development, and incur a $300 million charge, last year.

Calypso shared news of its acquisition by Novartis early on Monday morning, the first day of the J.P. Morgan Healthcare Conference. By then, the Swiss drugmaker had already starred in press releases from two other biotechs, namely Shanghai Argo Biopharmaceutical and Isomorphic.

Novartis is paying Argo $185 million upfront for rights to two clinical-phase RNAi cardiovascular disease programs. The deals give Novartis ex-China rights to a phase 1/2a prospect and global rights to a phase 1 program, plus an option to license candidates against up to two additional cardiovascular targets. The two deals are collectively worth around $4 billion in milestones.

Dongxu Shu and Patrick Shao, both of whom once worked at Arrowhead Pharmaceuticals, co-founded Argo in 2021 and received clearance to start a clinical trial the next year. In a statement, Shu called the Novartis alliance the “first significant overseas out-licensing transaction in the RNAi field from a Chinese biotech company.” The upfront fee will add to the $40 million Argo raised late last year.

Novartis’ third pre-conference deal involved Isomorphic, the biotech that Alphabet founded on Google DeepMind’s AlphaFold AI tech. Isomorphic has agreed to identify small molecules against undisclosed targets in return for $37.5 million in upfront cash with $1.2 billion in biobucks.