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AbbVie calls time on Reata alliance, claims $330m payback

Company has a focus on its core cancer and immunology areas

AbbVie Redwood

AbbVie has pulled out of a long-running partnership with Reata Pharma on Nrf2 activators for kidney and autoimmune diseases, returning rights to the programmes to the biotech in return for $330m in cash.

Reata is paying $75m initially to claim back rights to the lead candidate in the partnership – bardoxolone methyl (RTA 402) – which has reached the phase 3 testing stage. It will make the remainder of the buyback payments in 2020 and 2021.

Under the terms of the deal, AbbVie is also returning rights to another Nrf2 activator called omaveloxolone, in late-stage testing for inherited degenerative neuromuscular disorder Friedrich’s ataxia.

AbbVie first partnered bardoxolone in 2010 (when it was known as Abbott), paying $450m in upfront and near-term payments for rights to the drug as well as other Nrf2-targeting candidates outside certain Asian markets where the drug is licensed to Kyowa Hakko Kirin.

Two years later – at a time when some analysts were predicting potential blockbuster sales of $2bn to $3bn for bardoxolone – the partners were forced to halt a phase 3 trial in in chronic kidney disease (CKD) and diabetic kidney disease (DKD) on safety concerns.

AbbVie pulled out of the CKD/DKD partnership but retained opt-in rights in Europe to the Nrf2 programme, which was now focused only on rare diseases, as Reata prepared to self-market the drugs in the US if approved.

Bardoxolone is now in phase 3 trials for other renal disease indications, namely autosomal dominant polycystic kidney disease (ADPKD), genetic disease Alport syndrome and connective tissue disease-pulmonary artery hypertension (CTD-PAH).

Those are smaller markets than CKD/DKD, but according to Evaluate could still make bardoxolone a $1.3bn product in 2024 – which begs the question why AbbVie has decided to duck out of the alliance at this late stage.

One likely reason is that it has no presence in kidney diseases and a lot to contend with bringing a packed mid-stage pipeline in its core cancer and immunology areas to fruition. Investors seemed pleased by the opportunity for Reata as its share price rose 13% after the announcement .

Reata says AbbVie will be eligible for low single-digit, tiered royalties from worldwide sales of omaveloxolone and next-generation Nrf2 activators covered by the revised agreement, but not for bardoxolone methyl.

“Regaining these rights will increase Reata’s strategic flexibility and control regarding the development and commercialisation of our lead drug candidates, and our next-generation Nrf2 activators,” said Warren Huff, Reata’s chief executive.

“We have been actively preparing for the commercial launch of bardoxolone and omaveloxolone in the US, and we will now expand our efforts to include these international territories as well.”

Article by
Phil Taylor

11th October 2019

From: Research



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