Eli Lilly will partner with Rigel Pharmaceuticals to co-develop and commercialize Rigel’s Phase II-bound R552 for all indications—which they emphasized would include autoimmune and inflammatory diseases—through a collaboration that could generate up-to-$960 million for the South San Francisco, CA, biotech, the companies said.

R552 is Rigel’s lead receptor-interacting serine/threonine-protein kinase 1 (RIPK1) inhibitor. RIPK1 is a signaling protein implicated in a variety of key inflammatory cellular processes including necroptosis and cytokine production. The companies reason that inhibiting RIPK1 could effectively treat various autoimmune, inflammatory, and neurodegenerative disorders.

Lilly appears to be keenly interested in the neurodegenerative category. Last month, the pharma giant announced positive topline Phase II data showing that its modified beta amyloid-targeting antibody donanemab significantly slowed decline in a composite measure of cognition and daily function in patients with early symptomatic Alzheimer’s disease compared to placebo.

Now, as part of its collaboration with Rigel, it has agreed to be solely responsible for all clinical development and commercialization of brain penetrating RIPK1 inhibitors in central nervous system (CNS) indications.

At present, however, Rigel is pursuing ongoing preclinical activities with its lead CNS-penetrant RIPK1 inhibitor candidates. Rigel has agreed to perform and fund initial discovery and identification of CNS disease development candidates through candidate selection, when Lilly will become responsible for performing and funding future development and commercialization of the CNS disease development candidates.

R552 is set to begin Phase II trials this year through the collaboration. Last year, Rigel reported initial positive results from a Phase I study in healthy volunteers showing that R552 had an attractive PK and safety profile with a half-life of approximately 14 hours, “which may allow for once a day dosing.”

In preclinical studies, R552 has also shown prevention of joint and skin inflammation in a RIPK1-mediated murine model of inflammation and tissue damage.

“RIPK1 inhibitors are a promising approach, and R552 is an exciting addition to our immunology pipeline,” Ajay Nirula, MD, PhD, vice president of immunology at Lilly, said in a statement. “We look forward to working with Rigel to advance its clinical development.”

Nirula also stated that the collaboration fit in with Lilly’s immunology strategy, which he described as pursuing novel targets with potential to develop into best-in-class medicines for patients with autoimmune conditions.

$125M upfront

Lilly has agreed to pay Rigel $125 million cash upfront, and up-to-$835 million tied to achieving potential development, regulatory, and commercial milestone payments, plus tiered royalties ranging from the mid-single-digit to high-teens that will vary depending upon Rigel’s clinical development investment.

The partnership with Lilly was announced yesterday, over a month after Rigel president and CEO Raul Rodriguez said at the J.P. Morgan virtual 39th Healthcare Conference that the company “intends to enter a collaboration to fully develop RIPK1 assets.”

According to a regulatory filing, Rigel is responsible for 20% of development costs for R552 in the United States, Europe, and Japan, up to a specified cap, with Lilly funding the remainder of all development activities for R552 and other non-CNS disease development candidates.

Rigel has two opportunities to opt-out of co-funding R552 development activities in the United States, Europe, and Japan. If Rigel exercises the first opt-out right, Rigel will continue to fund its share of the R552 development activities in the United States, Europe, and Japan up to a maximum funding commitment of $65 million.

If Rigel does not exercise either of the opt-out rights, Rigel will receive royalty payments on net sales of non-CNS disease products at higher percentage rates, and will have the right to co-commercialize R552 in the United States with Lilly, on terms to be agreed by the companies.

Lilly will be responsible for all costs of global commercialization for R552.

Clinical setbacks

Lilly and Rigel are among companies eager to develop RIPK1 inhibitors. But the category has seen two setbacks over the past year: GlaxoSmithKline, in 2019, terminated development of a RIPK1 inhibitor for pancreatic cancer, GSK095, with GSK only saying at the time that the decision was “part of ongoing portfolio prioritization.”

Last year, Sanofi and Denali Therapeutics said they paused Phase Ib studies of DNL747 (also called SAR443060) in Alzheimer’s disease and ALS “based on the totality of DNL747 data”—though the companies added that the drug candidate met its safety endpoints. Instead, Denali and Sanofi opted to pursue development of a backup compound DNL788 (also called SAR443820), which showed more favorable properties and thus a more rapid path toward proof-of-concept clinical studies in multiple neurological indications.

The collaboration is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976. Lilly said the partnership with Rigel will not change its 2021 non-GAAP earnings per share guidance of $7.75 to $8.40.

“This collaboration will provide significant resources and expertise to support a broad investigation in multiple disease indications with our RIPK1 inhibitors,” Rodriguez added. “With Lilly’s extensive knowledge in immune and CNS diseases, they are our ideal partner to ensure the clinical and commercial success of our RIPK1 inhibitor program.”

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