Ablynx inks $840 million pact with AbbVie

Development, license and commercialization deal focuses on the anti-IL-6R Nanobody designated ALX-0061 for treatment of inflammatory diseases

| 3 min read

Jeffrey Bouley

GHENT, Belgium & NORTH CHICAGO, Ill.—Ablynx andAbbVie announced Sept. 23 that they have entered into a global licenseagreement to develop and commercialize the anti-IL-6R Nanobody ALX-0061 totreat inflammatory diseases. The deal is worth as much as $840 for Ablynx.

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ALX-0061 is Ablynx's proprietary anti-IL-6RNanobody, which successfully completed a Phase IIa study in February 2013reporting strong efficacy and safety data in patients with moderately toseverely active rheumatoid arthritis (RA) on a stable background ofmethotrexate.

Under the terms of the agreement, Ablynx will beresponsible for completing Phase II clinical development in both RA andsystemic lupus erythematosus (SLE). Upon the achievement of pre-defined successcriteria, AbbVie will exercise its right to in-license ALX-0061 and beresponsible for subsequent Phase III clinical development and commercialization.Ablynx will retain an option for co-promotion rights in Belgium, theNetherlands and Luxembourg.

As far as the payout breakdown, Ablynx willreceive an upfront payment of $175 million, which will partly be used to fundthe next phases of clinical development of ALX-0061. Upon achievement ofcertain development, regulatory, commercial and sales-based milestones, Ablynxwould be eligible to receive additional milestone payments of as much as $665million. On top of that, if the product makes it to market, Ablynx stands to earndouble-digit tiered royalties on net sales.

"This deal represents a major milestone for Ablynxand confirms both the potential value of ALX-0061 and the ability of ourNanobody technology to generate clinical candidates with very excitingpotential," said Dr. Edwin Moses, chairman and CEO of Ablynx. "It alsodemonstrates that we are delivering on our business model of strategicpartnering for the development and commercialization of selected programswithin our pipeline. We truly believe that AbbVie's significant expertise in rheumatologyaligns us with the ideal partner to further progress the development ofALX-0061 and to ensure we maximize the potential of this asset."

Zacks Investment Research agreed, commenting in aninvestor note that AbbVie's strong presence in the autoimmune disease market,thanks to its blockbuster drug Humira, should make a strong development andcommercialization partner for Ablynx.

"Meanwhile, this deal is in line with AbbVie'sefforts to expand and strengthen its autoimmune disorder pipeline," Zacks added."Earlier this year, the company had extended its agreement with biotech companyGalapagos NV for the development of autoimmune disease candidate, GLP0634, forCrohn's disease in addition to RA. AbbVie also signed a deal with AlvinePharmaceuticals for the global development of a novel oral treatment forpatients with celiac disease, an autoimmune disease."

Zacks noted concern about AbbVie's dependence onHumira but added that its analysts believe AbbVie will continue pursuingin-licensing deals and collaborations to boost its pipeline.

KBC Group analyst Jan De Kerpel wrote of Ablynx,whose shares jumped nearly 14 percent on the Monday news, that "This [deal]should attract the next level of investors and we anticipate the stock tostabilize at new highs."

Ablynx's Moses noted in the announcement about the deal that thecombined clinical expertise of AbbVie and Ablynx "will allow us to progresswith the rapid development of ALX-0061, with the current plan being theinitiation of various clinical trials in both RA and SLE during the course of2014 and 2015. We look forward to working together with AbbVie to potentiallydevelop a successful therapy for patients suffering from chronic inflammatoryconditions and to making a real difference to the quality of their lives."

"This agreement is further evidence of AbbVie'scommitment to pursue novel treatment options for autoimmune diseases," said Dr.Scott Brun, vice president of pharmaceutical development at AbbVie. "Anti-IL-6antibodies are a proven mechanism of action for autoimmune diseases andALX-0061 has shown potential in a Phase IIa clinical trial in RA. We arelooking forward to working with Ablynx to develop a potentially new andeffective therapy for patients suffering from serious chronic conditions suchas RA and SLE."

The ALX-0061 Nanobody targets the interleukin 6pathway via its IL-6 receptor, which plays a key role in the inflammation processin RA. ALX-0061's small size may potentially allow ALX-0061 to penetrate moreeffectively into tissues, according to the companies, and the potent,monovalent interaction of the molecule with its target is said to reduce thepossibility of off-target effects. Also, its binding to human serum albumin reportedlyprolongs the in-vivo half-life of theproduct and can lead to improved trafficking to areas of inflammation.

Ablynx inks $840 million pact with AbbVie

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Jeffrey Bouley

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