myasthenia gravis. The price is a good indication of how highly the market values the commercial potential in this indication area, where the Swedish company Toleranzia is also active.
Even before the acquisition of American Ra Pharmaceuticals had Belgian UCB a myasthenia gravis asset in its pipeline, the Phase III candidate rozanolixizumab. With the acquisition of Ra Pharmaceuticals, UCB now also owns zilucoplane, which strengthens its position within the indication area. As the drug candidates have different mechanisms of action, UCB believes they should be seen as complementary, rather than competitors for the same patient group.
Both drugs are also potential competitors to Alexion Pharmaceuticals blockbuster treatment Soliris (eculizumab), one of the world's most expensive drugs for orphan drug indications.
The boards of both UCB and Ra Pharmaceuticals have unanimously approved the deal, but for it to go through, approval from US Federal Trade Commission who this year alone has had opinions on three other major mergers: Bristol-Myers Squibb/Celgene and Roche/Spark Therapeutics and AbbVie/Allergan.
Expensive investments to secure market share
UCB's high bid premium (100 percent) is an interesting benchmark, not only for the niche market of myasthenia gravis, but for orphan drug indications as a whole, and by extension for the entire industry. The number of promising candidates in development is limited and major companies must invest heavily to secure upcoming blockbusters. Swedish Sobi's acquisition of Dova Pharmaceuticals for 9 billion SEK with a bid premium of 36 percent at the end of September, is an example.
Toleranzia – a Swedish upstart
UCB's focus on myasthenia gravis is also interesting from a Swedish perspective. Gothenburg-based Toleranzia develops its most advanced candidate TOL2 against this particular disease. The company's approach is to develop a completely disease-specific therapy, which can cure or significantly alleviate the disease, unlike UCB and Ra Pharmaceuticals, which are developing a non-specific treatment that broadly targets the immune system and only reduces the symptoms.
Toleranzia's tolerogen therapy only affects the part of the immune system that is linked to the disease, while other parts of the immune system, such as the ability to protect against infectious diseases and the ability to prevent cancer development, are left intact. TOL2 therefore does not cause any negative side effects that current non-specific therapies have on the immune system. The treatment aims to ensure that the proteins that are mistakenly attacked in the autoimmune disease are once again perceived as the body's own substances so that their function in the body is normalized.
Targeting more candidates in autoimmune diseases
The company's goal in myasthenia gravis is to conduct a positive Phase I/IIa clinical trial and subsequently out-license TOL2. The goal is also to identify and develop a new drug candidate in another autoimmune disease.
Having said that, it should be noted that TOL2 is in the preclinical phase and therefore cannot be compared in valuation to a Phase III candidate. However, both the contractual value of the UCB acquisition, as well as the disease indication, show that Toleranzia operates in an area with high commercial pressure.
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