Novartis Signs Licensing Deal Worth Up to $7.8 Billion With Abogen for mRNA Therapies

New Delhi: Chinese biotech company Abogen ‌said on Friday it has signed a licensing deal worth up to $7.8 billion with Novartis, opens new tab to develop messenger RNA-based therapies, underscoring the Swiss drugmaker's growing focus on an emerging class of treatments.

Novartis has come under investor scrutiny over its dealmaking strategy after ​setbacks with drugs acquired through previous purchases.

In September, it disclosed two late-stage trial failures that wiped nearly $30 billion ​from its market value and sparked calls from a major shareholder for tighter board oversight ⁠of future acquisitions.

Novartis said its approach to business development has remained consistent over time and that Abogen's ribonucleic ​acid technology complements its existing approach to autoimmune disease.

Under the deal, Novartis will gain exclusive rights to Abogen's experimental ​drug, ABO2203, and options to license other therapies based on Abogen's RNA technology.

Abogen will receive $575 million upfront with the potential to earn an additional $7.2 billion if the drug advances through development and wins regulatory approval.

"This deal has a better risk profile, ​as they pay a smaller amount upfront to secure the rights," said Gillian Hollenstein, lead manager at Point ​Capital Navigator Fund, which has shares in Novartis.

"However, Novartis does need some later stage deals with a higher level of predictability," ‌she added.

Novartis ⁠shares, which have recovered some of the losses triggered by the trial setbacks announced in September, were 0.5% lower by 1250 GMT in a subdued European pharmaceutical sector.

In August, US drugmakers Moderna, and Merck said that their personalized mRNA cancer vaccine reduced the risk of recurrence and spread of melanoma in a late-stage trial, boosting confidence in the ​broader promise of the technology ​beyond infectious disease shots.

Abogen's ⁠approach uses similar mRNA technology and the deal could help the Chinese biotech company compete globally in developing treatments for hard-to-treat autoimmune diseases.

The partnership is also in line with a ​broader rush by rivals such as AstraZeneca, opens new tab and Novo Nordisk, that have licensed obesity ​and other ⁠treatments from companies in China.

ABO2203 is designed to treat autoimmune diseases by targeting B cells, a type of immune cell that causes disease in conditions such as lupus and rheumatoid arthritis.

It works by using mRNA — which is naturally present ⁠in every ​cell in the body — to instruct patients' own cells to produce ​a treatment that destroys disease-causing B cells.

Novartis is also advancing remibrutinib, an oral drug that recently succeeded in a late-stage multiple sclerosis study.

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