With the goal of treating and curing patients with autoimmune diseases, Toleranzia drugs that utilize the immune system's own inherent power. For this purpose, tolerance technology has been developed that is based on disease-specific proteins, so-called tolerogens.
In autoimmune diseases, the immune system mistakenly attacks and destroys the body's own substances, and it is therefore often said that the body attacks itself. Toleranzia intends to use its tolerogen-based technology to induce immunological tolerance to the body's own substances that the immune system otherwise attacks. Such a solution has the potential to fundamentally correct the disease picture for people with autoimmune diseases.
Cure and long-term treatment
In other words, the intention is to treat the underlying cause of the disease with a long-term or curative therapy. This differentiates Toleranzia's drug candidate from current treatments that only address the symptoms. The medical need for disease-modifying treatments for autoimmune diseases therefore remains great.
Combined with the fact that Toleranzia's tolerogens are flexible and can be adapted for a range of autoimmune diseases, there is an appealing market space.
Joint initiative for investing in rare diseases
The autoimmune field is large and Toleranzia, which is a small biotechnology company, focuses on the subgroup of rare autoimmune diseases. The reasons are many. First, the medical need in rare autoimmune diseases is often particularly large, since their rarity means that both research approaches and diagnosis-specific drug development are less extensive. In addition, there are regulatory advantages to investing in rare diseases, e.g. orphan drug classification, fast-tracking and simplified processes may be relevant.
When a rare disease also lacks effective treatment options, orphan drug status is within reach. In addition to a favorable regulatory process, such status also comes with economic benefits such as lower regulatory fees and less extensive clinical development programs, which can translate into lower costs.
The likelihood of reaching the market is also greater for orphan drug candidates because treatment options are few, or non-existent, and once on the market, the lack of competition means both the opportunity for a large market share and room for a price premium as the drug benefit is significant. In this context, it can be mentioned that the average price of orphan drugs in the US is around 140 USD per patient per year.
The company's MG asset
Toleranzia's main candidate, TOL2, is being developed as a treatment for the rare autoimmune neuromuscular disease myasthenia gravis (MG). The company is currently working on the final steps of the preclinical program in parallel with preparations for a planned Phase I/IIa study. The company aims to out-license the candidate in order to finance new development projects in other rare autoimmune diseases with orphan drug potential. TOL2 has been granted orphan drug status in both the US and the EU.
To pave the way for a future deal, Toleranzia is actively working to create and maintain relationships with potential future takers (read more about this in a previous article). BioStock interview with the company's CBO Bjorn Lowenadler). It is therefore in the interest of both the company and the market to have a good understanding of the playing field in which it operates. BioStock has therefore taken a closer look at previous deals within the company's sphere.
Multiple reference areas
With Toleranzia as a starting point, it is interesting to consider business within (1) tolerogens, the technology that the company uses, and (2) rare diseases, which is Toleranzia's focus in the area of autoimmune diseases, and (3) myasthenia gravis which specifically concerns TOL2.
1. Examples within tolerogens
In May 2019, Canadian was acquired Parvus Therapeutics av Genentech, which is part of Roche GroupThe basis of the agreement was Parvu's patented precision medicine platform, Navacims, designed to trigger naturally occurring immune regulatory mechanisms to protect against autoimmune diseases. In preclinical studies, the Parvus platform demonstrated an ability to induce and expand disease-specific regulatory T cells, which restore balance to the immune system and stop the disease process. Similar to Toleranzia's treatment concept, Navacims-based therapies should not affect other parts of the immune system.
The agreement included global rights to develop, manufacture and commercialize Navacim-based therapies for inflammatory bowel disease (IBD), autoimmune liver diseases and gluten intolerance (celiac disease). The agreement included an undisclosed upfront payment, potential milestone payments of over USD 800 million and royalties on future net sales.
In October 2019, the Japanese pharmaceutical giant acquired Takeda the exclusive global rights to CNP-101/TAK-101 from American Cour Pharmaceutical Development Company, Inc. The candidate is an immune-modifying nanoparticle containing gliadin proteins based on Cours antigen-specific immune tolerance platform. The potential First-in-Class-therapy is designed to induce tolerance to gluten in individuals with celiac disease.
The agreement followed positive Proof-of-Concept-results from a Phase IIa clinical trial that studied the candidate's efficacy in 34 celiac disease patients. The study confirmed that the treatment could induce tolerance in people with an autoimmune disease. The agreement was worth up to $420 million in milestone payments and future royalties.
In today's year-end report commented Toleranzia's CEO Charlotte Fribert the event, which she believes has provided very important support for Toleranzia's technology and therapeutic model as Cours candidate is based on the same type of antigen-specific tolerance therapy as the one that Toleranzia is developing for MG:
»This is the first time that it has been clearly shown in patients with an autoimmune disease that our therapeutic principle provides a very good therapeutic effect. Commercially, this immediately meant a fantastic success for Cour« – Charlotte Fribert, CEO Toleranzia
2. Examples in rare diseases
Drug candidates for rare diseases, especially those with the potential for orphan drug status, have been hot in recent years. And rightly so. The market for orphan drugs was estimated at USD 131 billion in 2018, with a projected value of USD 242 billion by 2024, given an annual growth rate of 12,3 percent. This corresponds to twice the growth rate of the regular pharmaceutical market.
Toleranzia is not the only Swedish company active in the segment. There are also previous success stories. The largest is Wilson Therapeutics which was acquired in 2018 by Alexion Pharmaceuticals for a one-time sum of 800 million USD. Read more.
Wilson developed drugs for rare copper-related diseases, where the drug candidate WTX101 (tetrathiomolybdate) as a new treatment for Wilson's disease, was the most advanced at the time of the agreement. When the takeover bid came, WTX101 was undergoing a phase III clinical trial and had been granted approval the previous year. Fast Track-status of FDA.
It is worth noting that several of the largest deals in the pharmaceutical sector in 2019 also involved drugs for rare diseases. For example, in January 2019, Takeda – which later bought the rights to CNP-101/TAK-101 Court – American shire for USD 65 billion. Shire's portfolio included several drugs for rare diseases and the company's slogan is "Shire – the Leading Global Biotech Focusing on Rare Diseases".
Another Japanese giant that had its spending pants on last year was Astellas Pharma who acquired Audentes for a purchase price of USD 3 billion just before the end of the year. Through the purchase, Astellas expanded its portfolio of gene therapies based on adeno-associated viruses for serious rare neuromuscular diseases.
3. Examples within Myasthenia Gravis
The previously mentioned Alexion also returns as an important player in MG, which is of course of great interest to Toleranzia. For this rare autoimmune nerve and muscle disease, Alexion markets the drug Soliris (eculizumab), which is approved for refractory generalized MG (gMG) in patients who are positive for antibodies to the acetylcholine receptor (AChR), a group that cannot be treated with current standard therapy. Soliris has been called the world's most expensive drug and the cost of a month's treatment is around 50 USD.
In the same area, an interesting deal was concluded in October 2019 when UCB entered into an agreement to acquire Boston-based Ra Pharmaceuticals for USD 2,1 billion, a transaction to be completed in Q1 2020. Ra is developing zilucoplane, a complement protein C5 inhibitor that is under development for the treatment of several serious blood and tissue diseases. This includes gMG, but also immune-mediated necrotizing myopathy (IMNM) and amyotrophic lateral sclerosis (ALS). For gMG, zilucoplan has positive phase II results in the back and the candidate is currently undergoing a phase III study with primary data expected in 2021.
Aiming for out-licensing of MG assets
All of the example deals and projects have points of contact with Toleranzia's operations, and demonstrate the market value of an asset like TOL2. The fact that Toleranzia is already raking the ground for contract discussions – and thus getting a good idea of potential takers' requirements – creates the conditions for being able to present documentation that appeals to potential takers.
The content of BioStock's news and analysis is independent, but BioStock's operations are to some extent financed by companies in the industry. This post refers to a company from which BioStock has received funding.