AstraZeneca pushes deeper into rare disease market with $3.6bn deal for rights to liver drug

Drugmaker AstraZeneca today pushed deeper into the lucrative but high-risk rare diseases market, signing a cash deal worth up to $3.6 billion for rights to a promising treatment for an incurable liver condition.

The FTSE 100’s most valuable company — which stunned investors last year with the $39 billion buy-up of rare diseases specialist Alexion — has signed the new agreement with Californian biotech Ionis.

Astra will pay Ionis $200 million upfront and as much as $485 million more when the medicine, called eplontersen, obtains regulatory approval.

It also committed to milestone payments of up to $2.9 billion based on future sales.

The transaction is expected to close this year subject to regulatory clearance.

The companies will work together to develop and sell the drug which targets ATTR, a progressive and fatal genetic condition.

The inherited form of the disease causes nerve damage, while the age-related condition can lead to heart failure.

Patients with the most severe acquired form of the disease live for an average of just four years after diagnosis.

Mene Pangalos, who heads Astra’s drug discovery team, said: “Thanks to its precise liver-targeting properties, it also has the potential to be a best-in-class treatment for patients suffering from this devastating disease and who currently have limited options.”

Ionis was founded in 1989 by a former GSK research lead Stanley Crooke to develop antisense therapies, where drugs are used to silence faulty genes by knocking out mRNA which acts as a messenger between the cell’s DNA and protein-building machinery.

Astra’s shared price has powered ahead this year, to make the Cambridge-based company led by Pascal Soriot the most valuable on the FTSE 100 with a market cap of around £130 billion.

While the Covid-19 vaccine it developed and manufactured with Oxford University has put it at the frontline of the battle against the pandemic, it has not been without frustrations – from delayed deliveries to a rare side effect and varying reports over its efficacy.

Investors in the company see more value in the potential pipeline of complex drugs for rare diseases which prove more difficult for rivals to develop alternatives.

Astra shares fell as much as 1.8% to 8221.0p as investors digested its latest major investment. Shares in Ionis were up 4% to $27.50 on the Nasdaq in pre-market trading.