Wave Banks $170m Upfront In GSK Oligonucleotide Deal, Analysts Back Shift To Partnership Model
Lucrative Potential Milestones
Executive Summary
The US biotech has out-licensed a preclinical candidate to GSK as the firms pair up to discover and develop multiple oligonucleotide assets.
GSK plc is paying Wave Life Sciences Ltd. $170m upfront for global rights to its preclinical asset, WVE-006, as well as a collaboration to develop oligonucleotides which has prompted analysts to tout the benefits of a partnership model for the US biotech.
The $170m payment is split into $120m cash and a $50m equity investment. Wave is also eligible for up to $225m in WVE-006 development and launch milestones and up to $300m in sales milestones as well as tiered royalties on future sales. The first-in-class RNA editing drug is designed to address liver and lung manifestations of the genetic disease alpha-1 antitrypsin deficiency (AATD).
WVE-006 is based on Wave’s proprietary AIMer technology, which focuses on RNA editing, and clinical trial applications are planned for next year. The US firm will be responsible for development and commercialization until the first-in patient study has been completed, after which GSK will take the reins.
Furthermore, the discovery element of the deal enables GSK and Wave to advance up to eight and three programs, respectively, leveraging Wave’s proprietary PRISM platform and GSK’s expertise in genetics and genomics. PRISM is the only oligonucleotide platform to offer all three RNA-targeting modalities of editing, splicing and silencing, the partners claimed.
“We have quite a few targets that are not amenable to standard small molecules or antibodies but are amenable to manipulation by oligonucleotides,” GSK head of research John Lepore told Scrip. “We bring the target expertise and Wave brings the modality expertise and we think these two things will make a winning collaboration,” he added.
For each of GSK’s eight collaboration programs, Wave is also eligible for up to $130-$175m in development and launch milestones and $200m in sales milestones along with tiered sales royalties.
There is also an option to extend the research term for up to three more years, expanding the number of programs available to both firms. “Oligonucleotides are most amenable to addressing targets in the liver, lungs, eyes and CNS so it’s likely that our initial programs will be in these areas,” Lepore revealed.
The deal terms look among the strongest in the RNA editing space, Cantor Fitzgerald analyst Jennifer Kim said in a 13 December note, adding that they highlight the willingness of large cap companies to invest in preclinical-stage RNA editing programs focused on a single indication.
Wave expects the collaboration to extend its cash runway to 2025 and the upfront payment should help it focus on its three key programs: WVE-004 for amyotrophic lateral sclerosis (ALS)/frontotemporal dementia (FTD), WVE-003 for Huntington’s disease and WVE-N531 for Duchenne muscular dystrophy (DMD).
Moreover, the deal has triggered debate on whether Wave should shift to a more explicitly partnership-driven business model, similar to the one adopted by Ionis Pharmaceuticals over the last ten years, Leerink Swann analyst Mani Foroohar said in a 13 December note. Wave’s wholly-owned pipeline is focused challenging spaces such as DMD, Huntington’s disease and ALS/ FTD.
The latter indications in particular are high risk when it comes to operational execution and development timelines due to evolving regulatory expectations and competitive dynamics, Foroohar explained, adding that he would favor Wave exiting mid- and late-stage clinical development altogether.
As for GSK, chief scientific officer Tony Wood said, “Oligonucleotide therapeutics are becoming a mainstream modality and this collaboration will enable us to use our leading position in human genetics and genomics to advance novel oligonucleotide therapies.”
HC Wainwright analyst Andrew Fein said in a same-day note the timing of the deal was “perfect” for both firms as GSK is also attempting a broader reinvention of its pipeline.
Oligonucleotide Space Heating Up
WVE-006 should prove a fitting addition to GSK’s two other oligonucleotide pipeline assets. The most advanced of these is bepirovirsen, an antisense oligonucleotide approaching Phase III development for the treatment of hepatitis B. The UK major is also advancing a siRNA oligonucleotide, GSK4532990, into Phase II trials for non-alcoholic fatty liver disease.
In general, the oligonucleotide pipeline is becoming increasingly competitive as more big pharma firms dip their toes into the space through partnerships. Notable deals include Roche Holding AG and PureTech Health plc’s 2018 antisense collaboration, which could be worth more than $1bn in milestones, and Eli Lilly and Company/Avidity Biosciences, Inc.’s multi-target 2019 deal.