UCB adding Ra’s rare immunology assets in $2.5B takeout

Acquiring Ra helps UCB build rare disease immunology franchise, adds Boston-area research hub

UCB is looking to build its rare disease immunology franchise through its proposed $2.5 billion acquisition of Ra Pharmaceuticals -- a price that more than doubles the biotech’s valuation.

The deal would give UCB S.A. (Euronext:UCB) zilucoplan, a peptide inhibitor of C5. Last week, Ra Pharmaceuticals Inc. (NASDAQ:RARX) started testing the therapy in the Phase III RAISE study to treat generalized myasthenia gravis, with top-line data expected in early 2021.

UCB agreed to acquire Ra for $48 per share in cash, a 112% premium to Ra’s close of $22.69 on Wednesday. The takeout price is also a 30% premium to Ra’s 52-week high of $36.96. UCB said the deal fits the company’s “Accelerate and Expand” growth strategy that aims to expedite the development of new molecules and add to its pipeline through external partnerships and acquisitions.

UCB said zilucoplan complements the Belgian pharma’s rozanolixizumab (UCB7665), an anti-FCRN mAb that is also in Phase III testing for gMG with data expected in early 2021.

Both molecules are in clinical testing for other orphan indications. Zilucoplan is one of five therapies being evaluated in Massachusetts General Hospital’s Phase II/III adaptive platform trial for amyotrophic lateral sclerosis; it also is in clinical testing for immune-mediated necrotizing myopathy and renal disorders. Rozanolixizumab is being tested in immune thrombocytopenia (ITP) and chronic inflammatory demyelinating polyneuropathy (see “Lessons from Healey ALS” & “Testing the Neuroinflammation Hypothesis”).

Some of the indications for which zilucoplan is being tested are becoming increasingly competitive. In generalized myasthenia gravis, anti-C5 mAb Soliris eculizumab from Alexion Pharmaceuticals Inc. (NASDAQ:ALXN) is approved for the indication, and Alexion’s long-acting C5 inhibitor Ultomiris ravulizumab-cwvz is in Phase III testing.

In addition, efgartigimod from argenx S.E. (Euronext:ARGX; NASDAQ:ARGX), a human antibody Fc fragment that targets FCRN, is in the Phase III ADAPT trial to treat generalized myasthenia gravis. Top-line data are due in 2H20.

According to BioCentury’s BCIQ database, there are nine other molecules in clinical development for generalized myasthenia gravis.

It hasn’t all been smooth sailing in the clinic for zilucoplan. The molecule’s lead indication was at one time paroxysmal nocturnal hemoglobinuria (PNH), an ultra-rare indication for which Soliris and Ultomiris are the only approved therapies. But in December 2017, Ra announced mixed Phase II data in the disease setting (see “Ra Falls on Interim Phase II PNH Data”).

UCB said it intends to maintain Ra’s research facilities in Cambridge, Mass., as a new research hub to complement the company’s existing R&D hubs in Belgium and the U.K.

The company said the deal will be funded through existing cash and new underwritten bank loans. It expects the acquisition to be dilutive to mid-term earnings and accretive from 2024 onward. Pending shareholder approval, antitrust clearance and other closing conditions, the deal would close next quarter.

Ra gained $22.94 (101%) to $45.64 on Thursday. UCB was up €1.18 to €64.38 on Euronext.

The largest shareholders in Ra are New Enterprise Associates at 13%; Wellington Management at 11% and RA Capital at just over 10%.

Targets:

C5 - Complement 5

FCRN (FCGRT) - Neonatal Fc receptor

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