Flagging Novartis drops out of hep C race, punting a $440M Enanta pact

According to the biotech Enanta, you can count Novartis out of the race to develop next-gen hepatitis C cocktails. The pharma giant has bowed out of its partnership with Enanta on an NS5A inhibitor code-named EDP-239, which attracted a $440 million deal--including $36 million upfront--back in 2012.

Watertown, MA-based Enanta ($ENTA) says it's fine with the loss of the deal and will take full control of the NS5A inhibitor, which has been in a trial paired with Novartis' lead hep C program for alisporivir, in-licensed from Debiopharm. Novartis ($NVS) had been hit with a big setback on alisporivir when the FDA slapped a hold on the drug in 2012 after cases of pancreatitis were reported in the drug arm of a study. One patient died.

Shares of Enanta were trading flat on Wednesday morning.

Novartis hadn't advanced very far in the collaboration. A spokesperson for Enanta tells FierceBiotech that in addition to the upfront payment, the biotech landed an $11 million milestone. Now Enanta can find new ways to capitalize on the program at a time when hep C remains a red-hot field in R&D. The race to develop new cocktails that can cure the disease faster and more effectively while excluding interferon has attracted a bevy of Big Pharmas, including J&J, which announced a $1.75 billion buyout of Alios yesterday.

"Novartis notified Enanta that as part of an ongoing portfolio transformation, HCV research would no longer be a strategic focus for Novartis," stated Jay Luly, president and CEO of Enanta. "We appreciate Novartis' contributions to the clinical development of EDP-239 and its ready agreement to return the NS5A program to us. Enanta is now positioned with three wholly owned HCV programs from which future drug combinations can be explored."

In an email followup to FierceBiotech, the biotech added a clarification: "Enanta is not taking control of the (ongoing) studies and not alisporivir, which was licensed to Novartis from Debiopharm. These studies will be wrapping up, and we get the EDP-239 back and will be evaluating our development path forward."

Typically when biotechs welcome the loss of a partnership, they're trying to hide the sting of a setback. But this case looks different. Ever since the clinical hold, Novartis has largely been left out of the hullabaloo over next-gen hepatitis C drugs, with Gilead ($GILD) leading the way on Sovaldi and AbbVie ($ABBV) and Merck ($MRK) coming up closely behind with cocktails of their own.

"As part of an ongoing portfolio transformation, HCV will no longer be a strategic focus of Novartis," the pharma giant said in a statement to FierceBiotech. "Ongoing trials in HCV will not be affected by this decision and these trials will be completed as planned."

Enanta is partnered with AbbVie on its closely watched late-stage hep C effort.

- read the release

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