Gilead buys its way into the blockbuster NASH race with $470M deal

Gilead Sciences ($GILD) has shouldered its way into one of the industry's hottest fields, agreeing to pay as much as $470 million to get its hands on potential treatments for nonalcoholic steatohepatitis (NASH).

Under a deal with German biotech Phenex Pharmaceuticals, Gilead is getting a handful of small-molecule drugs designed to block the build up of bile at the heart of many common liver diseases, agreeing to hand over an undisclosed up-front sum and down-the-road milestone payments. The most promising asset, Px-104, is in Phase II development to treat NASH, a liver-scarring disease that affects as many as 20% of people in the developed world but has no approved therapies.

Each of Phenex's candidates works by activating the body's farnesoid X receptors (FXRs), which regulate bile and lipids in the liver. Targeting FXR can help prevent the accumulation of fat and occurrence of inflammation, according to the company, preventing the fibrosis that marks NASH and the related nonalcoholic fatty liver disease (NAFLD).

Phenex CEO Claus Kremoser

"After 15 years of research, FXR is now one of the few clinically validated targets for NASH, and we are delighted that Gilead will be continuing the research necessary to more fully realize its potential for advanced liver disease," Phenex CEO Claus Kremoser said in a statement.

For Gilead, the deal puts it just behind Intercept Pharmaceuticals ($ICPT), whose NASH-treating obeticholic acid, another FXR drug, has charted stellar efficacy and some troubling side effects in its ongoing Phase II program. Shire ($SHPG) is also toiling in the field after buying Lumena Pharmaceuticals for up to $260 million and getting its hands on a Phase I NASH treatment, trailed by La Jolla Pharmaceuticals ($LJPC), Raptor Pharmaceuticals ($RPTP) and others.

As for Phenex, selling off the FXR program leaves it with a stable of preclinical candidates designed to fight autoimmune diseases by targeting the nuclear hormone receptor RORγT. Under a $135 million deal signed in 2012, the biotech is working with Johnson & Johnson ($JNJ) on early-stage research in rheumatoid arthritis, psoriasis and inflammatory bowel disease.

- read the statement

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