Eli Lilly will use the platform of Avidity Biosciences to develop new treatments in immunology—the pharma giant’s third immunology collaboration announced in the past four months—and other unspecified “select indications,” through a partnership that could generate up to $440 million-plus for the six-year-old startup, the companies said today.
Based in La Jolla, CA, Avidity specializes in developing drugs using its antibody oligonucleotide conjugate (AOC™) technology. AOC seeks to combine the tissue selectivity of monoclonal antibodies and the precision of oligonucleotide-based therapeutics, with the aim of targeting genetic drivers of disease while overcoming barriers to the delivery of oligonucleotides.
Avidity’s AOC approach has shown modulation of disease-related RNAs in immune cells as well as other cell types and tissues, including muscle, heart, liver, and tumors, according to its website.
One of Avidity’s first applications of its technology is in muscle diseases, where the company is advancing a pipeline of therapeutic candidates for disorders that include myotonic dystrophy, Duchenne muscular dystrophy, and muscle atrophy. Avidity has said it has demonstrated both RNA interference and exon skipping in studies in vivo, as well as gene-specific knockdown of myostatin in skeletal muscle.
“This collaboration with Lilly provides an exceptional opportunity to leverage Avidity’s proprietary AOC platform in order to generate new therapeutic targets in disease areas that have been challenging to pursue using oligonucleotide-based approaches,” Kent Hawryluk, Avidity’s chief business officer, said in a statement. “Lilly’s extensive research, development, regulatory, and commercial capabilities make them an ideal partner, and we look forward to a long and productive relationship.”
Lilly has agreed to pay Avidity $20 million upfront, an unspecified investment of $15 million—and up to approximately $405 million per target for development, regulatory, and commercialization milestones. Avidity is also eligible for tiered royalties from Lilly that range from the mid-single to low-double digits on product sales.
The companies did not disclose how many targets they will work to develop.
“We are excited to expand our oligonucleotide research and development efforts through this strategic collaboration with Avidity,” added Andrew C. Adams, PhD, CSO for RNA therapeutics at Lilly. “Their expertise in studying the combination of monoclonal antibodies and oligonucleotide-based therapies represent a promising avenue of research toward development of new RNA-based medicines.”
Third immunology collaboration
The alliance with Avidity marks Lilly’s third immunology-focused collaboration in the past four months—and the second in as many months aimed to bolstering its pipeline in autoimmune and other inflammatory diseases.
On March 26, Lilly launched an up-to-$605 million-plus partnership with ImmuNext designed to study and develop a preclinical novel potential target for autoimmune disease treatments. Jay Rothstein, CSO at ImmuNext, described the target in a statement as “a first-in-pathway antibody that specifically targets the metabolism of lymphocytes to reprogram rather than suppress the immune system.”
And in December, Lilly launched a partnership with Aduro Biotech to develop novel immunotherapies for autoimmune and other inflammatory diseases using Aduro’s cGAS-STING Pathway Inhibitor program. Lilly agreed to pay Aduro $12 million upfront and up to approximately $620 million per treatment developed—without saying how many treatments they planned to develop.
Immunology is among Lilly’s areas of therapeutic interest, along with oncology, neuroscience, pain, and diabetes and diabetes-related complications.
Lilly and Avidity said their collaboration transaction is subject to clearance under customary closing conditions.
Lilly also said the deal will be reflected in Lilly’s reported results and financial guidance according to Generally Accepted Accounting Principles (GAAP)—and will not change its 2019 non-GAAP earnings per share (EPS) investor guidance.
In February, Lilly lowered its guidance to between $4.57 and $4.67 on a GAAP reported basis, and between $5.55 to $5.65 on a non-GAAP basis. The company cited anticipated impacts from its $8 billion acquisition of Loxo Oncology, completed February 15, and a negative Phase III confirmatory trial for its marketed cancer drug Lartruvo® (olaratumab) in advanced or metastatic soft tissue sarcoma, partially offset by a more favorable underlying business outlook.
Avidity has raised a total $30 million in venture financing. In January 2017, the company announced the completion of a $16 million Series B financing round, consisting of $10 million in new capital investment, and conversion of $6 million in convertible debt.
Takeda Pharmaceutical, through its venture group, led the Series B round, with participation from new and existing investors that included Alethea Capital, Alexandria Real Estate Equities, Brace Pharma, EcoR1 Capital, F-Prime Capital, Moore Venture Partners, and Tavistock Life Sciences.
