Arrowhead Pharmaceuticals and Amgen will together work to develop and commercialize two drugs designed to treat cardiovascular disease, the companies said Thursday.
Under the terms of the agreements, Amgen will pay Arrowhead a combined $56.5 million—$35 million in cash, and the remainder as an equity investment for stock in Arrowhead. Arrowhead could reap an additional $617 million from Amgen in the form of future payments tied to development, regulatory, and sales milestones, the companies said.
Arrowhead is headquartered in Pasadena, CA, but its research and development operations are based in Madison, WI. Amgen—which dwarfs Arrowhead by measures such as annual revenues, market cap, and number of employees—is based in Thousand Oaks, CA.
The companies announced the two collaborations early Thursday morning. Shares in Arrowhead (NASDAQ: ARWR) opened at $8.05, up 14 percent from Wednesday’s closing price of $7.04 a share. However, Arrowhead’s stock price gave back some of those gains throughout the day and stood at $7.30 when the closing bell rang.
Shares in Amgen (NASDAQ: AMGN) finished the trading day down 2.5 percent at $165.45 per share.
Both collaborations involve developing therapies for cardiovascular disease that use ribonucleic acid interference (RNAi), which destroys messenger RNA from viruses before the infected cell turns those RNA into proteins that propagate the infection. This interference is also known as “gene silencing.”
“Our capabilities and platform technologies are becoming increasingly validated, so we feel that now is a great time to expand the reach of our technologies and partner with other companies,” Chris Anzalone, president and CEO of Arrowhead, said in a prepared statement. “We have made great advances…that enable rapid development of new RNAi therapeutics across multiple disease areas.”
Under the terms of the one agreement, Amgen will receive an exclusive license to a program developed by Arrowhead that’s aimed at using RNAi molecules to lower levels of lipoprotein(a). That’s a type of cholesterol that can put patients at risk for heat disease, blood clots, and stroke.
With the other agreement, Amgen receives the option to exclusively license an RNAi therapy for a genetically validated target that is not being disclosed.
In a research note, analysts at RBC Capital Markets wrote that the undisclosed target could be ASGR1, a gene that Amgen has published on in the New England Journal of Medicine.
The transaction related to reducing levels of lipoprotein(a) is expected to close by December, the companies said.
Earlier this year, Amgen announced that a cholesterol-lowering drug it developed, Repatha (evolocumab), was the first of its kind to be approved in Japan.
“This collaboration builds upon our commitment to cardiovascular disease with targets that we believe are uniquely suited for RNAi-based therapy,” said Sean Harper, executive vice president of R&D at Amgen, said in a prepared statement. “Arrowhead’s expertise in RNAi makes them a valuable partner as we translate genetic discoveries into potential therapies that can improve health outcomes for patients.”
Arrowhead’s total haul from the two deals could eclipse the $56.5 million and $617 million figures announced Thursday. The companies said Arrowhead is eligible to receive royalties for products that are sold in the future under the two agreements.