Johnson & Johnson’s Janssen Pharmaceuticals will co-develop at least one of Achillion Pharmaceuticals’ lead hepatitis C virus (HCV) drug candidates and possibly more, under a worldwide license and collaboration agreement that could generate up to $1.1 billion-plus for Achillion.

The collaboration does not include a separate $225 million equity investment in Achillion by J&J’s venture capital subsidiary Johnson & Johnson Innovation-JJDC (formerly Johnson & Johnson Development Corporation).

According to Janssen, a key objective of the collaboration with Achillion will be to develop a short-duration, highly effective, pan-genotypic, oral regimen for HCV. The companies said they will explore an initial regimen that combines Achillion's ACH-3102, a second-generation NS5A inhibitor currently in Phase II clinical studies, with an NS3/4A HCV protease inhibitor plus an NS5B HCV polymerase inhibitor from the collaboration.

ACH-3102—which has been granted Fast Track designation by the FDA—is among lead HCV candidates Achillion is looking to commercialize through the collaboration. Other candidates include another Phase II compound, the NS3/4A protease inhibitor sovaprevir; and ACH-3422, a Phase I nucleotide NS5B polymerase inhibitor.

“The new collaboration with Achillion offers the potential to develop a new, simplified treatment option for those affected by hepatitis C,” Lawrence M. Blatt, Ph.D., global therapeutic area head, Janssen Infectious Diseases and Vaccines, said in a statement. Dr. Blatt is also president and CEO of Alios BioPharma, which J&J acquired last year for about $1.75 billion.

Among Alios’ attractions to J&J were its pipeline compounds that included AL-335, a uridine-based nucleotide analog in Phase I development, and AL-516, a guanosine-based nucleotide analog NS5B polymerase inhibitor in preclinical development. Both are now part of Janssen’s HCV pipeline, and according to the company are being developed with the express intent of targeting critical steps of the HCV virus replication cycle.

J&J hopes to carve a niche in HCV treatments, a field upended over the past year with the launches of Gilead Sciences’ Sovaldi (sofosbuvir), which racked up $10.283 billion last year, zooming to number-two on GEN’s list of the Top 25 Best-Selling Drugs of 2014; and AbbVie’s Viekira (ombitasvir/paritaprevir/ritonavir; dasabuvir), for which the company has predicted sales of more than $3 billion this year.

Janssen also has ongoing studies focused on investigating the NS3/4A protease inhibitor simeprevir in a number of treatment combinations and HCV patient populations, including patients deemed difficult to cure.

Achillion has agreed to grant Janssen an exclusive, worldwide license to develop and commercialize HCV products and regimens containing one or more of the licensed HCV lead candidates.

In return, Achillion said, it will be eligible to receive payments tied to achieving development, regulatory and sales milestones, as well as tiered royalties at percentages “of between mid-teens and low-twenties” on future worldwide sales. Janssen agreed to shoulder all development costs within the collaboration and all subsequent costs related to commercialization of the HCV assets.

And in return for the equity investment, Johnson & Johnson Innovation – JJDC will receive approximately 18.4 million newly issued, unregistered Achillion shares at $12.25 per share.

“We believe that their investment in Achillion through Johnson & Johnson Innovation – JJDC allows us to maximize the value from our HCV portfolio and also positions us to become a leader in complement factor D inhibition, applying our broad platform to a wide number of complement-related diseases,” added Milind Deshpande, Ph.D., Achillion’s president and CEO. “We believe this strategy provides an ideal scenario to create further value for our shareholders.”

The collaboration and equity investment deals are subject to customary closing conditions, including termination or expiration of any applicable waiting periods under the Hart-Scott-Rodino Act.








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