AstraZeneca gains license for Ardelyx's NHE3 inhibitor program

The deal, which includes the Phase II-ready lead compound RDX5791 for treating complications associated with end-stage renal disease and chronic kidney disease, could be worth as much as $272 million

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LONDON—Looking for a boost to itspipeline, AstraZeneca PLC struck a deal this week with Fremont,Calif.-based Ardelyx Inc. to secure a worldwide exclusive license forArdelyx's NHE3 inhibitor program, including the Phase II-ready leadcompound RDX5791.
Under the terms of the agreement,AstraZeneca will pay a $35 million upfront fee, with developmentmilestones of as much as $237.5 million and milestones related tolaunch and commercialization of potential drug candidates, as well astiered, double-digit royalties.

Ardelyx will conduct clinical trials inPhase II for the NHE3 inhibitors, though AstraZeneca will assume thesubsequent development costs. As part of the transaction, Ardelyx hassecured an option to co-promote the product in the United States,subject to agreed limitations.
Additional financial details were notdisclosed.

"We've been impressed with ourinteractions with AstraZeneca throughout this process and areconfident with their commitment to develop this moleculesuccessfully. AstraZeneca has been aggressive about pursuing novelmedicines, making them among the best possible worldwide partners forvalidating Ardelyx's unique approach to drug development," saidMike Raab, CEO of Ardelyx. "RDX5791 is our first clinical exampleof how our technology can be used to develop non-absorbed,small-molecule therapeutics. We are delighted that AstraZenecarecognizes the potential of this compound."

NHE3, or sodium-hydrogen antiporter 3,is a protein essential in the absorption of sodium in the intestines,and the NHE3 inhibitor RDX5791 is intended for the treatment ofcomplications associated with end-stage renal disease and chronickidney disease.

Ardelyx has evaluated RDX5791 in aPhase IIa clinical trial in constipation-predominant irritable bowelsyndrome (IBS-C) and in two Phase I clinical studies in healthysubjects for its ability to divert sodium absorption in thegastrointestinal tract. Through its unique mechanism of action,RDX5791 is believed to decrease the absorption of dietary sodium andthus divert sodium excretion from the kidney to the feces, sparingthe kidney and the cardiovascular system from unhealthy exposure ofboth sodium and fluid accumulation.

It is on the basis of this mechanism ofaction that the companies plan to develop RDX5791 for use inend-stage renal disease and chronic kidney disease in addition toIBS-C. They also intend to explore development opportunitiesfor otherdiseases that are a consequence of sodium and fluid overload.

"This licensing agreement acceleratesour strong commitment to developing new medicines for people withrenal complications, including those resulting from diabetes," saidGunnar Olsson, vice president and head of CVGI Innovative Medicines,AstraZeneca. "There is a significant unmet medical need to addressthe challenges caused by sodium and excess fluid in people with renalimpairment. With a novel mechanism of action, RDX5791 has thepotential to have a major impact on how doctors treat thesepatients."

Looking at the deal, Zacks InvestmentResearch commented in an investor note that "We are encouraged byAstraZeneca's focus on the high-potential emerging markets. We arepleased with its efforts to expand its pipeline and portfolio throughmergers and acquisitions." According to Zacks, this Ardelyxagreement—along with the Ardea acquisition, an Amgen collaborationand the expansion of a diabetes alliance with Bristol-MyersSquibb—"all represent the company's efforts in this direction.We expect more such deals in the near term."

However, Zacks points out that itremains concerned about generic competition faced by the company'skey products, noting that in 2011, the company lost revenues worthalmost $2 billion to generics. The firm also added, "The weaklate-stage pipeline at AstraZeneca coupled with slow Brilinta uptakealso bothers us," leading to a Neutral recommendation from Zacksright now regarding AstraZeneca stock.

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