Novartis CEO Vas Narasimhan

Novartis has agreed to acquire Chinook Therapeutics for up to $3.5 billion, the companies said today, in a deal that will expand the buyer’s renal pipeline with the Seattle biotech’s two late-stage programs designed to treat rare, severe chronic kidney diseases.

Based in Seattle, Chinook is a developer of precision medicines designed to target rare, severe kidney disorders. The company’s pipeline of four disclosed programs is led by atrasentan, an oral endothelin A receptor antagonist (ERA) that is in ongoing Phase III development for Immunoglobulin A Nephropathy (IgAN).

Data is expected to be read out in the fourth quarter from the pivotal ALIGN trial (NCT04573478), a double-blind, placebo-controlled study designed to compare the efficacy and safety of atrasentan to placebo in patients with IgAN who are at risk of progressive loss of renal function. In an earlier Phase II study, patients treated with atrasentan had shown significant reductions in proteinuria with good tolerability, including liver safety profile, the companies said.

“We are excited by this unique opportunity to address one of society’s most challenging healthcare issues, with the potential to bring additional much-needed treatment options to patients,” Novartis CEO Vas Narasimhan said in a statement.

In addition to IgAN, Iptacopan is in development for several other complement-mediated diseases, including kidney diseases C3 glomerulopathy (C3G), atypical hemolytic uremic syndrome (aHUS), lupus nephritis (LN), and blood disorders immune thrombocytopenic purpura (ITP) and cold agglutinin disease (CAD).

Atrasentan is also in development for glomerular diseases, with the drug being assessed in the Phase II AFFINITY trial (NCT04573920), an open-label, basket study designed to evaluate the efficacy and safety of atrasentan in patients with proteinuric glomerular disease who are at risk of progressive loss of renal function.

Internal IgAN candidate

Novartis already has an internal IgAN candidate in its pipeline—iptacopan (LNP023), a drug discovered at the pharma giant’s Novartis Institutes for BioMedical Research.

In June 2021, Novartis trumpeted positive data from a 112-patient Phase II study (NCT03373461) showing that at the highest dose of 200mg twice daily, dosing with iptacopan resulted in a 23% reduction in proteinuria compared with placebo at 90 days. The drug is now under study in the Phase III APPLAUSE-IgAN trial (NCT04578834), which is assessing iptacopan in reduction of proteinuria and slowing renal disease progression in primary IgA Nephropathy patients.

Also in Chinook’s pipeline:

  • Zigakibart (BION-1301), a subcutaneously administered anti-APRIL monoclonal antibody that is set to start a Phase III trial in IgAN in the third quarter.
  • CHK-336, a selective small molecule lactate dehydrogenase A (LDHA) inhibitor in development for primary and idiopathic hyperoxalurias, with the potential for once-daily oral dosing. In April, Chinook paused dosing of healthy volunteers with CHK-336 in a Phase I study (NCT05367661) per study protocol to investigate an unspecified serious adverse event that occurred in a single participant following the first dose in the 125 mg multiple ascending dose group.
  • “Multiple” research and discovery programs for unspecified rare, severe chronic kidney diseases.

Chinook plans to expand its pipeline through a collaboration with Ionis Pharmaceuticals announced in May that is designed to combine Chinook’s precision medicine approach and expertise in nephrology with Ionis’ expertise in RNA therapeutics.

The companies agreed to partner on the discovery, development and commercialization of an antisense oligonucleotide (ASO) therapy for an undisclosed “rare, severe chronic kidney disease with significant unmet medical need.” Chinook agreed to pay Ionis an undisclosed upfront payment as well as potential additional payments tied to achieving development and regulatory milestone payments, plus royalties. Ionis agreed to oversee IND-enabling toxicology studies while Chinook agreed to take responsibility for clinical development and commercialization.

Chinook stock soars

Chinook investors roared their approval of the Novartis acquisition deal by sending shares of the company soaring 56% in early trading Monday, to $37.40 at 10:08 a.m. from $23.99 at the close of trading Friday. Novartis shares rose 1% on the SIX Swiss Exchange, to CHF 91.14 ($100.34).

Novartis agreed to acquire all outstanding shares of Chinook through a subsidiary for $3.2 billion upfront and a contingent value right (CVR) payment of up to $300 million tied to achieving regulatory milestones for atrasentan. Chinook shareholders will be issued CVRs that provide for payments of up to an additional $4 per share for atrasentan—of which $2 is related to IgA nephropathy and another $2 is related to focal segmental glomerulosclerosis.

At $40 a share, the upfront price represents a 67% premium over Chinook’s closing price Friday.

The transaction is expected to close in the second half of this year, subject to customary closing conditions that include approval by Chinook’s stockholders, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and receipt of regulatory approvals. The boards of both Novartis and Chinook have already approved the deal.

“We look forward to closing the deal, to a smooth transition for Chinook employees and to welcoming them to Novartis,” Narasimhan added.

Pending the closing of the deal, Chinook said, it will continue to operate as a separate and independent company.

“We are pleased that Novartis recognizes the significant value that the Chinook team has built with our pipeline of clinical and preclinical programs for patients with rare, severe chronic kidney diseases,” stated Eric Dobmeier, Chinook’s President and CEO. “We believe this transaction is great news for kidney disease patients and the programs we have built at Chinook.”

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