Novartis Inks $1.23 Billion Deal for CKD-510, a Selective HDAC6 Inhibitor from South Korea’s CKD Pharma

On November 8, Novartis and Chong Kun Dang Pharmaceutical (CKD), a South Korean pharmaceutical company, reached a cooperation agreement on CKD's histone deacetylase 6 (HDAC6) inhibitor, CKD-510.

According to the agreement, Novartis will obtain global exclusive rights to CKD-510 except in South Korea, and Chong Kun Dang Pharmaceutical will receive an upfront payment of $80 million. Additionally, based on future drug development and regulatory milestones, Chong Kun Dang Pharmaceutical may receive up to $1.225 billion (approximately 9 billion RMB).

This transaction is the largest outbound licensing deal for CKD this year and also the largest deal in South Korea's pharmaceutical industry this year, causing the company's stock price to soar by 25%.

CKD is a long-standing pharmaceutical company in Korea. Its candidate drugs under development are mainly used to treat diabetes, cerebrovascular diseases, hypertension, and hyperlipidemia, among others, with multiple pipelines in Phase III clinical trials. HDAC inhibitors are innovative drugs it is advancing for related diseases such as neurology, oncology, and immunology.

In addition to CKD-510, Chong Kun Dang Pharmaceutical has three other HDAC inhibitors under development: the pan-PDAC inhibitor CKD-581 for the treatment of multiple myeloma, the PDAC6 inhibitor CKD-501 for the treatment of autoimmune diseases, and the HDAC6 inhibitor CKD-504 for the treatment of Huntington's disease. All three drugs have entered the clinical development stage.

As the protagonist of this transaction, CKD-510 is a highly selective HDAC6-targeted small molecule inhibitor, with its indications yet to be disclosed. CKD stated that CKD-510 may have an impact on atrial fibrillation as well as the rare genetic disorder Charcot-Marie-Tooth disease (CMT).

In March 2020, the U.S. FDA designated CKD-510 as an orphan drug for the treatment of CMT.

CMT is one of the most common hereditary neurological disorders, damaging peripheral nerves and causing muscle atrophy in the hands and feet, as well as loss of motor and sensory functions, making walking or performing normal tasks difficult. According to the U.S. National Institute of Neurological Disorders and Stroke, it is estimated that 1 in 2,500 people in the United States are affected by CMT, with 2.6 million people impacted worldwide.

HDAC6 is a class IIb histone deacetylase. Unlike other HDACs, it is primarily located in the cytoplasm and can deacetylate non-histone proteins. In this way, it regulates various cellular processes, including cell growth, cell migration, intracellular transport, and cell death. Additionally, HDAC6 can play a role in the clearance of ubiquitinated proteins through its ubiquitin-binding domain.

CKD sees the potential of HDAC6 in non-oncology indications, therefore, specifically developed CKD-510 for non-oncology indications.

In animal model studies, CKD-510 increased the level of acetylated α-tubulin, reduced the activity of the calcium-activated protease calpain, improved action potential duration (APD90), and decreased the incidence and duration of atrial fibrillation.

Moreover, the non-hydroxamate property of CKD-510 helps overcome the limitations of HA-based HDAC inhibitors, such as genotoxicity, rapid elimination from the body, and the formation of numerous metabolites. Therefore, Chong Kun Dang Pharmaceutical (CKD) claims that CKD-510 has the potential for applications beyond the oncology field.

Previously, CKD stated that it had completed the Phase I clinical trial of CKD-510 in France in 2021. The trial results demonstrated that CKD-510 exhibited good safety and tolerability in treating CMT patients.

Currently, Novartis has 10 ongoing R&D pipelines in the neuroscience field, with five candidate drugs in Phase III clinical trials. Their indications are mainly migraine, multiple sclerosis, and spinal muscular atrophy. The acquisition of CKD-510 by Novartis this time will fill the gap in its pipeline for CMT.

Currently, there are no approved drugs for the treatment of CMT. According to data released by Coherent Market Insights, the CMT market will exceed $3.4 billion by 2028. The newly acquired CKD-510 could potentially open up this highly promising market for Novartis.

At the same time as Novartis reached an agreement with CKD, it is also divesting and streamlining its pipeline and operations.

On September 15, 2023, Novartis announced that its board had approved the spin-off of the company's generic drug division, Sandoz, with the spin-off planned to take place around October 4. Once approved, Sandoz will be listed on the Swiss Stock Exchange. Novartis stated that this spin-off is for "shareholder value," meaning divesting non-core assets and retaining high-margin products.

In the same month, Novartis terminated the "Mutual Termination and Release Agreement" signed in 2021 with BeiGene regarding the PD-1 antibody Tislelizumab. Earlier in July, the two parties also ended their collaboration on the TIGIT inhibitor Ociperlimab.

On September 11, 2023, Novartis announced the termination of the development of its mid-stage gene therapy project GT005, which was acquired by Novartis in December 2021 for an $800 million upfront payment from Gyroscope Therapeutics, a company specializing in ocular gene therapy.

On August 25, 2023, Novartis announced the discontinuation of the development of the anti-Tgf-β antibody NIS793 and returned it to Xoma Corporation.

In April this year, Novartis announced that it would cut 10% of its R&D pipeline.

Novartis CEO Vas Narasimhan stated that the company will focus on strengthening the R&D and commercialization of innovative drugs in the future. The decision to abandon these R&D projects was due to two main reasons: firstly, they fall outside the five core disease areas of cardiovascular, hematology, solid tumors, immunology, and neuroscience, and their clinical or commercial value is limited; secondly, compared with other pharmaceutical giants, Novartis has an excessive number of pipeline projects, which results in less investment per project and scattered resources.

While practicing 'decluttering,' Novartis is also actively acquiring new assets. As the company streamlines its portfolio, it remains focused on developing innovative drugs in key therapeutic areas. In the future, CKD-510 could become Novartis' next blockbuster drug, supporting its transformation into a 100% innovative pharmaceutical company.