United Therapeutics has acquired exclusive global rights to Arena Pharmaceuticals’ Phase III pulmonary arterial hypertension (PAH) candidate ralinepag (APD811), in a licensing deal that could generate more than $1.2 billion for Arena, the companies said today.

Ralinepag (APD811) is a next-generation, oral, selective potent, once-daily prostacyclin receptor (IP) agonist intended for PAH. According to Arena, ralinepag’s application as a potentially best-in-class agent for the treatment of PAH is supported by the drug’s potency on vasodilation, inhibition of proliferation of vascular smooth muscle cells, and inhibition of platelet aggregation, combined with an extended half-life.

Arena discovered ralinepag and until now has developed it internally. Following positive Phase II results, Arena has advanced ralinepag into the Phase III ADVANCE program, consisting of three trials. Patients are now being enrolled into the 700-patient ADVANCE OUTCOMES (301) trial (NCT03626688) designed to assess the efficacy and safety of ralinepag when added to PAH standard of care or PAH-specific background therapy in subjects with World Health Organization (WHO) Group 1 PAH.

Two other Phase III trials are planned:

  • ADVANCE CAPACITY (302), an exercise capacity study designed to evaluate a peak oxygen uptake (VO2) via cardiopulmonary exercise testing (CPET) in approximately 140 patients in a 7-month fixed treatment duration. The trial is set to begin in the fourth quarter.
  • ADVANCE ENDURANCE (304), an exercise capacity study measuring 6-minute walk distance (6MWD) in approximately 280 patients in a 7-month fixed treatment duration. The trial is expected to start in the first quarter of 2019.

On October 2, Arena trumpeted positive results from a planned interim analysis of APD811-007 (NCT02279745), an ongoing open-label extension of an earlier Phase II trial, in which ralinepag showed durable, long-term improvements in both pulmonary vascular resistance (PVR) and 6-minute walk distance (6MWD), plus a favorable long-term tolerability profile. The Phase II trial, APD811-003 (NCT02279160) generated topline results showing that patients treated with ralinepag had a 29.8% improvement in PVR compared to the placebo arm, and a 20.1% improvement in PVR compared to baseline.

Arena is also enrolling patients by invitation to a Phase III open-label extension study (NCT03683186) for participants with WHO Group 1 PAH who have participated in another Phase II or Phase III study of ralinepag.

“Very Impressed”

“We are very impressed with the clinical development plan and FDA coordination being managed by Arena,” United Therapeutics’ chairman and CEO Martine Rothblatt, Ph.D., said in a statement. “We have conducted extensive due diligence on ralinepag, applying our two decades of knowledge about PAH. We are confident that after achieving FDA approval via at least one of its several different potential regulatory pathways to success, this product will help greater than 10,000 patients annually from the 2020s and well into the 2030s, while complementing our existing portfolio of PAH therapies.”

United Therapeutics’ top-selling drugs Remodulin® and Tyvaso® contain the PAH treatment treprostinil as the active ingredient. For the first nine months of 2018, Remodulin net product sales fell nearly 11%, to $429.1 million from $480.9 million in January–September 2017, while Tyvaso sales in Q1-Q3 2018 stood at $294.0 million, up 7.9% from $272.6 million a year earlier.

Among reasons cited by United Therapeutics for the decline in Remodulin sales: the first Remodulin price increase in the U.S. since 2010; a reduction in the price Remodulin is sold to an international distributor in connection with a transfer of additional regulatory and commercial responsibilities to that distributor last year; and a one-time impact of a change in contractual minimum inventory levels with a U.S. distributor.

United Therapeutics has acted to shore up its PAH pipeline this year. In September, it agreed to license and co-develop MannKind’s clinical-phase dry powder formulation of treprostinil in a collaboration that could generate more than $95 million for MannKind.

And in August, United Therapeutics completed its up-to-$216 million acquisition of SteadyMed Therapeutics, announced in April. That deal bolstered United Therapeutics’s pipeline with SteadyMed’s lead product candidate indicated for PAH, the drug–device combination Trevyent (treprostinil sodium).

The licensing agreement is subject to expiration or termination of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions.

United Therapeutics agreed to pay Arena $800 million upfront, up to $400 million in payments tied to achieving regulatory milestones, and low double-digit tiered royalties on annual net sales of ralinepag.

Significant Milestone

“This transaction represents a significant milestone in the development of ralinepag and will strategically position Arena to aggressively advance our best-in-class pipeline, anchored by etrasimod and olorinab, with the focus and resources essential for long-term success,” added Arena president and CEO Amit D. Munshi.

Etrasimod is a next-generation, oral, selective sphingosine-1-phosphate (S1P) receptor modulator being developed as a treatment of multiple immune and inflammatory diseases. In releasing third-quarter results on November 7, Arena said Phase III planning is ongoing in ulcerative colitis, while regulatory discussions and Phase II/III planning ongoing in Crohn’s disease; a Phase II trial was in progress in primary biliary cholangitis (PBC); and program planning was ongoing in atopic dermatitis.

Olorinab is a peripherally restricted, oral, full agonist of the cannabinoid receptor 2 (CB2) intended for the potential treatment of visceral pain, specifically pain associated with Crohn’s disease. According to Arena, olorinab generated positive Phase IIa data in pain associated with Crohn’s disease, while a Phase IIb program targeting the treatment of gastrointestinal pain is being developed.

Investors responded to news of the licensing deal this morning with a stock-buying surge that sent Arena shares on the Nasdaq Global Select Market up 29% from yesterday’s closing price of $32.52, to $42.06 in early market trading as of 9:50 a.m.