Novartis Announces Dual Collaborations for COVID-19 and Pancreatic Cancer Therapies with Potential Deal Value Up to $767 Million

Compiled | Hemingway

Swiss pharmaceutical giant Novartis has been continuously collaborating with external companies to further enhance its R&D capabilities.

On October 28, Novartis and Zurich-based Molecular Partners AG simultaneously announced a transaction involving two candidate therapeutic agents, MP0420 and MP0423, for the prevention and treatment of COVID-19 infection.

Under the terms of the agreement, Novartis provided an upfront payment of approximately $22 million. Novartis also agreed to acquire $44 million worth of shares in the company at a price of $25 per share, which will give Novartis a 6% equity stake in Molecular Partners. Additionally, Molecular Partners is eligible to receive up to $165 million in milestone payments if Novartis successfully commercializes the two candidate drugs. Molecular Partners has agreed to waive royalties in low-income countries, aligning with Novartis’s strategy to ensure that the needs and affordability differences across various countries are addressed.

Molecular Partners has developed a series of trispecific antiviral DARPin candidates with specificity and neutralizing potency, primarily targeting multiple critical sites on the SARS-CoV-2 spike protein essential for infection. In contrast, antibody therapies under development for COVID-19 often target only a single viral epitope.

In addition to potentially targeting multiple sites on the virus, DARPin candidates do not require cold-chain storage, which could be a critical factor for treating COVID-19 patients in developing countries lacking cold-chain infrastructure.

Under the terms of the agreement, Molecular Partners will initiate Phase I studies of MP0420 and conduct all preclinical work related to MP0423 in the coming weeks. Upon completion of these studies, Novartis will undertake Phase II and Phase III clinical trials of MP0420 and assume responsibility for all further development activities for MP0423. As the programs advance, both companies will collaborate with Sandoz, Novartis’s generics and biosimilars division, to expand manufacturing capacity.

On the same day, XOMA also announced that its anti-TGFβ monoclonal antibody NIS793 had received approval to enter Phase II clinical trials, triggering a $25 million milestone payment from Novartis.

The Phase II clinical trial of NIS793 (NCT04390763) aims to evaluate the efficacy and safety of NIS793 in first-line metastatic pancreatic ductal adenocarcinoma (mPDAC), focusing on pancreatic cancer patients with a high unmet need for new treatment options.

This collaboration agreement, reached between Novartis and XOMA in 2015, pertains to the development and commercialization of anti-TGF-β therapies. Under the terms of the agreement, XOMA is eligible to receive up to $445 million in additional milestone payments. Furthermore, upon regulatory approval and commercialization of NIS793, XOMA will receive tiered royalties ranging from mid-single digits to low double digits on net product sales. Notably, approximately 30% of the milestone payments related to NIS793 will be applied toward partial debt obligations owed by XOMA to Novartis, with the remaining balance paid to XOMA in cash.

Meanwhile, XOMA also stated that this milestone payment will further strengthen its financial position, reducing its debt to Novartis to less than $10 million due to the ongoing royalty aggregation strategy. More importantly, this marks significant clinical progress for this key asset within our broader portfolio of potential milestones and royalties.

Reference Source:

1.Novartis Harnesses Molecular Partners' DARPin Technology Against COVID-19.

2.XOMA Earns $25 Million Milestone Payment as Anti-TGFβ Antibody Enters Phase 2 Clinical Study in Metastatic Pancreatic Cancer.